Updated 3.15pm to clarify the distinction between Malta Freeport Terminals and Malta Freeport Corporation.

The CEO of Malta Freeport Terminals is being investigated over alleged money laundering and corruption in connection with construction magnate Charles Polidano and a multi-million-euro contract. 

Sources said Alex Montebello and his wife were arrested on Friday and taken in for questioning at the same time as Polidano and his son Gordon – both of whom were released on police bail on Saturday.

The police are investigating how Polidano won a lucrative contract in 2014 to carry out works at the Freeport for which the company may have overpaid.

Investigators are looking into a property that was transferred from Polidano to Montebello for what they believe is a suspiciously low price. 

At the time of the property transfer, Montebello was the chief financial officer of Malta Freeport Terminals. He has since been promoted to CEO.

Malta  Freeport Terminals Ltd is a private company that runs the transshipment operation at Malta Freeport.  It is separate from the Malta Freeport  Corporation that is owned by the Malta government and is the authority that regulates the freeport.

When contacted, Montebello’s lawyer Arthur Azzopardi said: “My client insists this investigation shall lead to the only one conclusion possible, i.e.  that he is not guilty of any wrongdoing since he committed no wrongdoing.

Alex Montebello and his wife were arrested on Friday and taken in for questioning at the same time as Polidano and his son Gordon – both of whom were released on police bail yesterday

He said Montebello is cooperating in full with the investigation and has provided all documents requested from him and has clarified any issues raised.

“Naturally my client understands that investigations require time to be concluded and without wanting to pressure the investigative authorities, he kindly urges them to be diligent yet timely.”

Polidano Bros also told Times of Malta it was assisting the authorities to verify payments made to the company in a transaction in 2014 that involved a public deed.

It categorically denied any wrongdoing.

“The group is confident the authorities will be satisfied once these verifications have taken place. The group will continue to cooperate fully with the authorities.”

Polidano, 62, is one of richest men in country

Polidano, 62, is one of the richest men in the country. 

His Polidano Group is one of the leading construction firms, regularly involved in major national infrastructure projects. 

Sources privy to the investigation have pointed at suspicions of links between the arrest of Polidano and the recent resignation of Infrastructure Malta boss.

Trustin Farrugia Cann has resigned from the post of chief executive of the government’s roads agency after just one month in the job.

He claimed he had resigned to focus on his career as a football referee. Political sources however have pointed to a row between Polidano and a rival bidder for a major government contract worth around €50million.

Meanwhile, Times of Malta last month reported that Polidano made a massive €20 million payment to the authorities in a bid to settle decades of unpaid taxes.   The deal was struck after some two years of talks with the Inland Revenue Department. 

Polidano racked up €30.4 million in unpaid taxes in 2020

In 2020, Polidano had racked up €30.4 million in unpaid taxes on his flagship company Polidano Brothers Limited. Since then, he is understood to have settled two smaller tax bills of €6.3 million and €1.2 million, stemming from other companies he owns, which have also long been outstanding. These were also being discussed with the authorities at the time.

Two years ago, Polidano had been ordered to settle the amount or face the possibility of court action.  What had followed were some 24 months of fraught negotiations with the authorities. To be eligible to bid for government tenders, interested parties are meant to be up to date with their payments to the fiscal authorities.

In March this year, Times of Malta reported how Infrastructure Malta had revoked two multi-million-euro tenders due to his lack of tax compliance.

Investigators are looking into a property that was transferred from Polidano to Montebello for what they believe is a suspiciously low price.

Polidano had won tenders to carry out €11.8 million worth of construction works to extend the Marsamxett ferry landing as well as a €19.7 million tender for the upgrading of Lascaris Wharf. 

However, both contracts were revoked.

Sources said that, for years, Polidano and other industry players, would circumvent this requirement by routinely entering tax repayment plans, only to stop honouring them once they secured another major government contract.

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