One of three companies taken to court by the government over unpaid ground rent for the Casino di Venezia site in Vittoriosa has been declared bankrupt by a court and is to be liquidated.
The company, Vittoriosa Gaming Ltd (VGL) also owns all the shares in another of the companies that are being sued. According to a court judgement handed down earlier this week, VGL had run into considerable financial difficulties and was unable to even pay its utility bills.
It was taken to court by one of its shareholders, Casino Municipale di Venezia (CMV), which owns 40 per cent of VGL’s shares. A company called Bet Live Ltd owns the remaining 60 per cent.
The court documents show that VGL, which operated the Casino di Venezia, had fallen on difficult times and owes millions to its creditors.
A court heard how revenue from online gaming fell from €3 million to €700,000, while casino revenue fell from €2.1 million to €600,000. Between January and October 2012, VGL incurred a gross loss of €766,000 and a net loss of €1.3 million.
The company failed to audit its accounts for a number of years but a 2012 exercise showed that VGL owed €783,000 to the Social Security Department, €411,000 to its employees, €123,000 to the Lotteries and Gaming Authority and over to €200,000 to ARMS Ltd. The company also owes its creditors some €4.7 million.
The Lotteries and Gaming Authority (now Malta Gaming Authority) suspended the casino’s licence over unpaid games tax, but CMV had stepped in, paying over €533,000 to the authority on VGL’s behalf.
However, the bills stacked up again and the licence was suspended for a second time early in 2013. The casino finally closed down in April. For a time VGL was involved in remote (online) gaming operations but all activity has since ceased.
In court, VGL said it was in the process of finding a buyer, insisting that this was a better solution for its creditors. But the court, seeing that all operations had ceased and no bright future appeared to be in sight, declared the company insolvent and ordered its liquidation.
VGL holds all the shares in Scamps Ltd, which holds all the shares in Galleys Ltd. The three companies have a sub-let from Port Cottonera Ltd, which was granted the original emphyteusis by the government in 1999. The ground rent is supposed to be divided between the three companies.
A fourth company, Port Cottonera Hotel Development Ltd, which was developing a hotel next to the casino site, owes €5 million to VGL.
In March 2015, the government announced that it had filed a court order against Port Cottonera Hotel Development Ltd, Galleys Development Ltd, and Vittoriosa Gaming Ltd. The case was filed over unpaid ground rent.
These companies were supposed to pay the Government Property Division (GPD) €582,343.55 per year after a four-year rebate. The rent was to increase by 15 per cent every 10 years and the government reserved the right to cancel the contract if the tenants fell behind on two consecutive payments.
Questions addressed to the Parliamentary Secretariat for Lands in September 2016, asking how much was owed to the GPD in backdated ground rent, remain unanswered to this day. Prime Minister Joseph Muscat gave a partial reply in answer to a Parliamentary Question some weeks ago, confirming that the case is ongoing, but there was no word on the amounts due to the GPD.
This newsroom has once again contacted PS Deborah Schembri, asking if the latest development in court will affect the government’s case for the repossession of the prime Vittoriosa waterfront site. The questions, sent on Wednesday, remain unanswered.