The Malta Independent 20 October 2018, Saturday

Julie Meyer lays into Maltese ‘bribe culture’, says she had planned to quit island

Thursday, 17 May 2018, 17:28 Last update: about 5 months ago

The founder and CEO of an investment firm that went bust last year and had its investment licence withdrawn by the financial services regulator this month over serious breaches has lashed out at the country, alleging that Malta is a place where “everyone gets a cut for everything that is done.”

In her regular electronic newsletter, Julie Meyer also alleged that the company had already decided to relinquish its Malta license and leave the island, adding that the bureaucracy in Malta was “unbearable” and that she had has “never experienced such wild misogyny and jealousy in my life.”

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Meyer’s Ariadne Capital went into bankruptcy administration in December 2017.

The company had faced multiple claims of unpaid bills in Malta and abroad, and has been accused of fraud and theft. Meyer has attacked not only media houses that have reported on the company’s actions but also two directors who resigned from her MFSA-regulated company within the Ariadne Capital Group (Ariadne Capital Malta Limited's), amid serious concerns over the company's mismanagement following a recent spate of legal cases in Malta.

A Maltese court had last year issued a garnishee order against Meyer following a €59,000 claim by a Naxxar-based website design company. A former employee had also gone to court over outstanding wages amounting to some €22,000.

The court had later issued instructions for Meyer to be located, after she had failed to show up at for a hearing.

Meyer had organized the Follow the Entrepreneur Investor Summit, where both Prime Minister Joseph Muscat and Economy Minister Chris Cardona were invited as speakers.

On 11 May, the Malta Financial Services Authority said it had suspended the investment licence of ACML with immediate effect. The MFSA said the decision came after it identified serious breaches of licence conditions by the company.

These included; failure to have in place a Compliance Officer at all times; failure to cooperate and collaborate with the MFSA; failure to abide by the 'dual control' principle; inadequate resources to carry out management of Alternative Investment Funds; and failure to establish a risk management function, which is separate from the investment management function.

Reacting in her newsletter, Meyer explained that she had decided to set up shop in Malta in 2016 after the UK’s Brexit vote. “What could go wrong? Everything,” she wrote.

She then went on to list “the facts.”

The company, she said, had invested more than €1 million in Malta “to show its commitment to the island.”

“We promoted the country non-stop despite the news from the Panama Papers, Paradise Papers, the Pilatus Bank scandal and the assassination of Daphne Caruana Galizia,” Meyer said. “Finally, we had to stop our promotion because it was clear that something is very wrong indeed in Malta.”

Meyer said running the firm in Malta was “the most difficult I have ever encountered,” adding how she had previously worked in other EU countries.

“We simply couldn’t get anything done. In each situation, unbearable bureaucratic roadblocks emerged. For example, the authorities still have not allowed us to register shares for our firm and have not indicated any reason for this. We were prevented from appointing auditors, officers and even changing the registered office.”

She then says that in Malta there is a prevalent culture “where everyone takes a cut of anything that gets done.”

“Some people call it bribes and back-handers; they call it ‘the way we do business here’. This leads to blackmail if you don’t want to play by those rules of the game. From our perspective, it’s not the way business should be done, and I was surprised to find this in the EU. I am surprised today that Malta is in the EU. Come what may: We don’t do bribes and won’t be blackmailed.”

Meyer also described employment laws in Malta as something “out of Marxist Russia.”

“The employment authorities demand that you pay double or triple tax – over-writing consulting contracts in other jurisdictions, and demanding that an individual who happens to live in Malta whether they work for an unrelated firm to the one they are suing you for, anyone can establish Maltese employment status post facto, and you must pay them accordingly. There is nothing rational or reasonable about this – certainly fundamentally at odds with any kind of desire to be a haven for start-ups or venture capital investing.”

Referring to her firm’s legal woes in Malta, Meyer wrote that “a supplier can issue a garnishee order where one is ‘guilty until proven innocent’ – freezing one’s assets without a judgement or claim filed even if they do not even have or do not issue a claim, demonstrating that the whole episode was an abuse of process.”

Turning to the revocation of ACML’s license by the MFSA, Meyer said three days earlier her firm had written to the MFSA informing it that it wished to close its business in Malta “because of the MFSA’s failure to process basic administrative tasks, as well as needing to protect shareholder interests by operating in a secure legal and business environment.”

“Sadly, the MFSA’s response to ACML’s closure notice vindicates the decision to leave Malta. We do not want to suspend our license; we want to relinquish it and leave Malta.”

She added: “I have never experienced such wild misogyny and jealousy in my life. Taking direction from a woman appears to be difficult there. I’ve been told that I emasculate the men, have male energy and the big bad thing is: I am not married and have no children.”

Insisting that she has a choice “where to build” she urged her readers to “watch this space as we build in new jurisdictions with new partners.”

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