Monday

3rd Oct 2022

China link exposed in Malta corruption scheme

  • Photos of late Maltese journalist Daphne Caruana Galizia at the European Parliament in Brussels (Photo: europarl.europa.eu)

A Chinese executive at a global consultancy firm was at the centre of suspected Maltese corruption schemes linked to the murder of journalist Daphne Caruana Galizia, according to an investigation.

Chen Cheng, a 43-year old from Shanghai, is a 'managing director' in Accenture's energy division.

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He also negotiated investments in Malta on behalf of Chinese state firm Shanghai Electric Power.

And his proxies created two shell-firms - 'Dow's Media Company' and 'Macbridge International Development' in Hong Kong - which were used in suspected corruption schemes involving top Maltese officials, according to a joint probe by Reuters, the Times of Malta, the Organised Crime and Corruption Reporting Project, and German newspaper Süddeutsche Zeitung, published on Monday (29 March).

Shanghai Electric Power ended up publicly investing €380m in Maltese energy firm Enemalta.

Meanwhile, Dow's and Macbridge were used to secretly funnel millions of euros together with another shell-firm, '17 Black' in Dubai, which was linked to Maltese government officials involved in the Shanghai Electric Power deal.

The officials were the prime minister's former chief-of-staff, Keith Schembri, and former energy minister, Konrad Mizzi.

Schembri is currently facing corruption charges in a separate case, while Mizzi left government.

The group of European newspapers and journalists uncovered Chen's Hong Kong-based firms after consulting Maltese police documents, the leaked 'Panama Papers' trove of company records, and other sources, including interviews in a 'KFC' restaurant on a fact-finding trip to Nanjing in China.

They did it as part of efforts to continue the work of Maltese journalist Daphne Caruana Galizia, who was killed by a car bomb in 2017.

There was no suggestion that Chen was involved in her murder.

But she had been investigating his role following a tip-off by a Maltese official when she was assassinated.

And a Maltese tycoon, Yorgen Fenech, who owned the '17 Black' firm in the China-energy scheme, has been charged with ordering her killing.

"Working out the truth of those ... companies was really at the centre of her work. She was determined to get to the bottom of that mystery," Daphne Caruana Galizia's son, Matthew, told Reuters.

"We call for fresh charges to be pressed against Yorgen Fenech, Keith Schembri, and Konrad Mizzi and for Chen Cheng to be extradited to Malta to face justice," the Daphne Caruana Galizia Foundation, an NGO in Malta, also said.

It called for Schembri's former boss, the then prime minister Joseph Muscat, to face fresh scrutiny.

And it accused Accenture of complicity, saying it had "known about Chen's implication in corruption and illicit offshore dealings", but "has chosen to retain him, suggesting that his actions are endorsed by his employer".

The revelations come at a tense time in EU-China relations, involving tit-for-tat sanctions over Chinese human-rights abuses.

They also risk causing a stink around China's flagship international investment scheme, the 'Belt and Road Initiative', of which the Chen-brokered Shanghai Electric Power deal in Malta was part.

The Maltese police, using Interpol, asked China about Dow's Media Company back in 2018 regarding "illicit funds" linked to "possible corruption and money laundering," according to documents seen by the investigative project.

They also made similar enquiries to the United Arab Emirates, but got nothing in return.

"China's exchanges and cooperation with other countries are all open and transparent," the Chinese foreign ministry also told the investigative project.

Mizzi, the former energy minister, said he knew Chen only in his "official" capacity as a representative of Shanghai Electric Power.

Accenture lets its executives have legitimate side-jobs.

But it said we are "carefully reviewing these allegations as they relate to one of our people. We adhere to the highest ethical standards in every market in which we operate and have zero tolerance for any deviation from those standards".

Shanghai Electric Power and Chen, as well Schembri and Fenech's lawyers, declined to comment.

The trial of Caruana Galizia's killers ended in February and her family is satisfied it fingered the right man - Fenech - as the mastermind of her assassination.

But there is still an ongoing public inquiry into the wider political context of the events, which scarred the image of the EU micro-state.

There are also two judicial enquiries and an ongoing police investigation into the Chen-linked corruption schemes.

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