The attorney general has lost her appeal against a court decision to appoint an administrator to oversee Keith Schembri’s business empire which was hit by a freezing order. 

It means all of the OPM former chief of staff's businesses can continue to run normally, despite the investigation order issued against them, with employees able to keep their jobs and get paid.

The attorney general, state advocate and the police commissioner had appealed against the decision to appoint an administrator, taken by Mr Justice Lawrence Mintoff last month during pending proceedings where Schembri is claiming that a freezing order issued by the Criminal Court, breached his rights.

The court had agreed that Schembri's businesses had been “paralyzed” in a drastic and devastating manner by the freezing order, which was  a “draconian and disproportionate” tool, placing them in the impossibility of making bank deposits or paying creditors. Nor could they ensure adequate insurance cover, the timely arrival of imports and maintain the good quality of perishable goods.

But the State appealed, accusing Schembri of forum shopping because the request for an administrator had already been turned down by the criminal court. The attorney general also argued that Schembri was suffering no damage to his human rights and that the garnishee order was there while criminal investigations are ongoing. 

However, in their decision on Monday, Chief Justice Mark Chetcuti and judges Giannino Caruana Demajo and Anthony Ellul disagreed with the AG’s arguments that such an interim measure could not be given by the court. They said Schembri was just a suspect at this stage so it was essential that an administrator would oversee the company operations. 

Keith Schembri's companies

According to the Malta Business Registry, Schembri's business empire, which started off in the 1990s, includes a range of industries from engineering to recycling to drinks suppliers. Some of the companies he is a shareholder in include:

• Kasco Holdings
• Kasco Limited
• Kasco Recycling
• Kasco Engineering Company
• Navis Logistics
• It's Good Limited
• Berner Malta
• 3City Designs Limited
• Tekhne Industrial Limited
• FSV Limited 

It agreed that the purpose of the garnishee order was not to block the operation of a going concern but to ensure that its assets were preserved pending the outcome of any investigations. As long as the assets were “protected and preserved” without hindering the investigations in any way, it was in the best interests of all to ensure that businesses continued with their operations as smoothly as possible. 

The court dismissed arguments about forum shopping because the criminal court had not turned down the request because it was illegal or made no sense but simply because it could not, legally, issue such an order. 

It agreed with Schembri’s lawyers, Edward Gatt and Mark Vassallo, regarding an anomaly in the law which provides for certain precautionary measures when someone is accused before the court but none when the person is a suspect. 

The Appeals Court, therefore, turned down the Attorney General’s appeal and sent the case back to the magistrate before the Criminal Court to appoint an administrator following discussions between the parties. The administrator will have to be paid by the companies and will follow directions given by the court.