By Joanna Demarco, Julian Bonnici and Daiva Repečkaitė.
This story has been fact-checked by an independent fact-checker.
- Investigators believe Spanish contractors involved in the Kappara Junction and Malta Public Transport channelled millions to the nephew of a former Spanish MP. The former MP is facing a corruption trial.
- The nephew’s companies then allegedly transferred funds to blacklisted former Joseph Muscat government advisor Shiv Nair.
- Former Transport Malta CEO James Piscopo received suspicious cheques from accountant Robert Borg the same year both contracts were awarded.
- Transaction records seen by Amphora Media show:
- Shiv Nair and his companies received €2.3 million net from an affiliated company allegedly part of the scheme.
- James Piscopo received €30,000 in suspicious cheques issued by Robert Borg. He also received a net €10,000 from Borg through a separate account.
- Spanish contractors of Kappara Junction sent €263,000 to a company owned by the nephew of the former Spanish MP.
- Keith Schembri once used Yorgen Fenech to try to leak documents linking Piscopo to alleged payments.
Multi-million payments issued to Shiv Nair, the blacklisted former advisor of Joseph Muscat’s government, are suspected of forming part of a kickback scheme on the Kappara Junction and Malta Public Transport contracts.
Transaction records uncovered in an investigation by Amphora Media, MaltaToday, and Times of Malta reveal that Nair and his affiliated companies received a net amount of €2.3 million from Aitken Spencer Ltd – a company owned by his director’s brother that investigators believe is tied to the scheme.
Meanwhile, investigators have also flagged a series of suspicious cheques issued to former Transport Malta CEO James Piscopo.
Piscopo received €30,000 across nine cheques in 2015, the year the contracts for the Kappara Junction Project and the management of Malta Public Transport were awarded.
Piscopo received the cheques from Robert Borg, an accountant and former secretary of Transport Malta who has served on numerous entities’ boards and councils.
Borg has been charged in connection to the Vitals Global Healthcare case and has previously faced controversy for his lucrative earnings from the General Workers Union’s publicly-funded community work scheme.
In seven of the nine cheques cashed by Piscopo, Borg was both the payer and payee – effectively writing them out to himself. They were then endorsed to Piscopo, who deposited them into his account. Investigators suspect this method was intended to obscure the transactions.
Amphora Media has been informed of further payments between Borg and Piscopo’s Undecim Five Investments, a company he later renamed and which was eventually dissolved. Borg transferred €20,000 to Piscopo’s Undecim Five – while Undecim Five transferred €10,000 to Borg.
Piscopo confirmed that he received the payments from Borg, with whom he said he has a longstanding friendship. However, he insisted that the payments were linked to a consultancy firm he operated with Borg while serving as Transport Malta & Lands Authority CEO. He said taking those payments was “stupid” but not illegal and ultimately rejected any links to the alleged kickback scheme.
He could not explain why the cheques were issued before the company’s creation – nor why Borg initially wrote the cheques out to himself. Borg refused to answer questions sent surrounding his transactions with Piscopo.
Piscopo said that the Kappara Junction Project was fully audited and stressed he had little to no knowledge of who Shiv Nair is.
Amphora Media found no financial records linking Nair and Piscopo. Borg disputed transaction records between himself and a Maltese company owned by Nair. He insisted that he had never met or had dealings with Nair.
Nair refused to answer any questions about the claims.
“I am a private businessman and not a public servant. Moreover, and perhaps more to the point, my companies have always conducted their activities in Malta and elsewhere in a regular and lawful manner and do not need to provide explanations with respect to their legitimate dealings,” he said.
The Spanish Connection
In 2015, Spanish-led contractors won two large infrastructure tenders. A consortium led by Constructora San Jose SA won a tender to build the Kappara junction, while Autobuses de Leon was chosen as the new private operator for the public transport system. On the surface, the tenders appear unrelated.
Sources have revealed that Spanish authorities have reportedly identified a total of €5.14 million in transfers from the accounts of Constructora San Jose SA (the Spanish partner in the Kappara Junction joint venture) and a company called Malta Public Transport (the brand name of operator Autobuses de Leon, a sister company of ALSA) to two companies in Spain: Hasaura Real Estate SL and Translock IT SL.
The director of these two companies is Luis Carlos Yanguas Gómez de la Serna, the nephew of Spanish former MP Pedro Ramon Gomez de la Serna.
Pedro Ramón Gómez de la Serna and another former MP, Gustavo de Arístegui, have been charged in Spain with heading a criminal organisation to obtain foreign contracts in a case that lists Constructora San Jose as a client company.
ALSA is listed as a client of Voltar Lassen, a firm owned by Pedro de la Serna and Gustavo de Arístegui. Malta Public Transport’s owner, Autobuses de Leon, is a sister company of ALSA group. ALSA emphasised that it was separate from Autobuses de Leon when responding to questions.
In the Spanish police probe, Luis Carlos Yanguas Gómez de la Serna was found to appear to have acted as a “commission agent” for the company at the centre of the investigation. Luis Carlos Yanguas Gómez de la Serna stopped working with Voltar Lassen in January 2014. He was not charged in connection to the case.
Amphora Media has seen records of six transactions worth approx. €263,000 between Constructora San Jose and Hasaura Real Estate.
Pedro Ramon Gomez de la Serna and his lawyer rejected any suggestions that he had any knowledge or connection with the alleged scheme – and stressed that Luis Carlos Yanguas Gómez de la Serna stopped working with Voltar Lassen before the transactions linked to Kappara Junction and Malta Public Transport – and had since set up an independent consultancy firm.
Transport Malta said that both the Kappara project and Malta Public Transport contract were audited by the European Commission and National Audit Office, respectively – it said none of the payments were mentioned and that it would not be privy to any of the payments mentioned in our questions.
Malta Public Transport categorically denied the claims. It said that Hasaura Real Estate SL & Translock IT SL provided “specific services required by MPT and provided to MPT by its suppliers” – and said these were in no way related to the awarding of the public transport concession. However, it did not respond to questions to clarify the services provided.
Autobuses de Leon said that MPT signed an agreement with Hasaura Real Estate in 2015 to optimise the management of its fleet and later transferred it to Translock IT. It said it used this management software from March 2015 to June 2020.
It rejected all wrongdoing and denied any knowledge of Nair.
The ex-MP’s nephew Luis Carlos Yanguas said the payments involving his companies Hasaura Real Estate SL and Translock IT had nothing to do with his uncle.
Yanguas said the payments were part of a “client-supplier relationship”, and were backed up by all the necessary documentation and agreements.
Constructora San Jose’ insisted that it acts under the strictest legality. Constructora San Jose’ did not respond to questions as to why it was also issuing payments to Hasaura Real Estate.
Payments allegedly flow from Spanish companies to Shiv Nair
After arriving in the accounts of Yanguas de la Serna’s companies, a portion of the funds originating from Malta Public Transport was allegedly transferred to Shiv Nair through a Hong Kong-based company, Aitken Spencer Ltd.
Transaction records seen by Amphora Media show that between 2014 and 2020, Nair and his affiliated companies, Suez Group Finance and Suez Group Capital, received a net amount of €2.3 million from Aitken Spencer Limited.
Aitken Spencer Ltd’s director and shareholder is Subodha Manahara Withanage. It was incorporated in Hong Kong on 27th January 2015, the same year the contracts were awarded.
Withanage’s brother appears to be Rasika Withanage, a director at Nair’s Suez Capital, who has also held significant roles and worked in other companies linked to Nair. Amphora Media has seen transactions to Rasika Withanage, which are believed to be his salary.
The Withanage mother’s residence is listed as the headquarters of Suez Holdings in Sri Lanka.
Nair has been permanently blacklisted by the World Bank for fraud and corruption since 1999 – as exposed by Daphne Caruana Galizia in 2013. Still, he served as an advisor on energy and foreign direct investment within the government of Joseph Muscat.
At the time Nair denied the accusations, but the World Bank has confirmed to Amphora Media that the blacklisting still applies.
Caruana Galizia had also reported on Nair’s connections to former MP Pedro Ramón Gómez de la Serna. Gomez de la Serna confirmed that he met Shiv Nair, but he described it as a coincidence.
Kappara Junction and Malta Public Transport Contract Raised Red Flags
Autobuses de Leon won a tender to take over the ownership and management of Malta Public Transport on 8th January 2015. Piscopo, who was Transport Malta’s CEO at the time, chaired the tender evaluation committee and oversaw the selection.
Eyebrows were first raised in 2014 when a visit by then-Transport Minister Joe Mizzi and Piscopo to Spain as part of the selection process for the new public transport operator was shrouded in secrecy.
The National Audit Office later flagged the lack of documentation on negotiations between Transport Malta and the winning bidder as a concern.
The contract is valid until 2030.
A week after the Autobuses de Leon takeover, the five potential bidders for the Kappara Junction were announced, with SJ Kappara JV, which involved Maltese partners, winning the bid in December of that year. The project cost was budgeted to cost €22.5 million and was inaugurated in January 2018. The final cost was estimated at around €35 million.
The project benefited from EU funding intended for less developed regions. Transport Malta even involved European Investment Bank experts to provide an “independent positive recommendation of the [Kappara Junction] project’s feasibility”.
Keith Schembri claimed James Piscopo received kickbacks from major projects
Allegations of Piscopo receiving kickbacks on infrastructural projects are not new. In December 2020, the Times of Malta revealed that the Malta police had launched an investigation into Piscopo.
Read the story by the Times of Malta here
According to reports in the Times of Malta, in 2019, former OPM chief of staff Keith Schembri attempted to use Yorgen Fenech to leak a story to the media, alleging that Piscopo had received a considerable amount of money.
Schembri is believed to have provided Fenech with documentation showing Piscopo’s dealings, including his offshore account at Nedbank Private Wealth (formerly Fairbairn Private Bank) in Jersey. Schembri alleged that the funds held at the bank could be upwards of €600,000.
Intelligence obtained by investigators suggests that Piscopo does hold a bank account at Nedbank Private Wealth (formerly Fairbairn Private Bank) in Jersey.
Piscopo served as the Labour Party’s CEO in the run-up to its 2013 electoral victory and was a key member of Joseph Muscat’s inner circle. He was appointed executive chairman of Transport Malta and then later the Lands Authority CEO following Labour’s rise to power but no longer holds that role.
Apart from his job there as CEO, Piscopo also chaired the state’s utility billing company, ARMS Ltd, and sat on the boards of Enemalta and Projects Malta.
Piscopo resigned soon after the claims were made public.
Malta’s police declined to comment on the status of the investigation or whether an investigation was ever opened into the alleged kickback scheme involving the Kappara Junction and Malta Public Transport contracts.
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