Vista Point: Phantom apartment block rented to IIP applicants
A Gozo apartment block was being rented out to prospective IIP applicants despite not having been finished yet, an investigative journalistic collaboration has revealed.
The Vista Point apartment block, situated in Marsalforn and managed by Trident Property Management, was a popular choice of residence for several applicants. There are 30 separate application files within the Henley & Partners database that include a rental agreement at Vista Point.
However, the apartment in itself was still under construction while the property was being leased out to applicants.
One email thread from 2014 obtained through the Passport Papers shows how IIP applicant Svetlana Aleynikova’s Vista Point apartment was not yet finished when she visited the property with her family two months after signing the lease agreement.
“The family visited their apartment yesterday in Vista Point and met with [the developer]. They were surprised that the construction is not yet finished. It is on the last stage, but still not finished. For example, not all electricity connections are finished, and so on. It is obvious that the client cannot reside in such a property,” the email reads.
In a separate thread, the applicant’s assistant admitted that this was a minor issue, as the family was not planning on residing there in the first place, but argued that the client should have been informed about the situation beforehand.
As part of the IIP application, prospective applicants would have to provide utility bills from the property they were renting as a proof of residence. But in the case of Vista Point, the property manager supplied invoices to Henley Estates with the following explanation:
“Trends Development Ltd. had signed with Enemalta plc (Government subsidiary) an Agreement for the installation of a sub-station to supply electricity, exclusively, to the Vista Point Project. We are advised that installation should commence shortly. Thereon, the meters will be installed in each and every apartment. Due to the above circumstances, Enemalta is supplying electricity under a provisional system.”
The planning application for the building was first submitted on 15 November 2005, and eventually approved by the Planning Authority in 2006. The applicant is Michael Farrugia on behalf of Trends Co Ltd.
According to documents from the Malta Business Registry, Michael Farrugia had previously been a shareholder in Trident Property Management, but his shares were transferred to an Emanuel Joseph Farrugia in 2014.
Part of the proposed application has since been constructed and is now livable, but a large chunk of the plan remains a construction site.
The real estate branch of Henley & Partners signed an Introduction Agreement with Trident Property Management in 2015. Through the agreement, Henley & Partners would direct prospective applicants looking to buy real estate for the purposes of the IIP to lease with Trident Property Management.
In return, Henley & Partners would receive a commission fee on each completed transaction.
A separate Introducer Agreement was in place between the two parties, where Trident Property Management would introduce prospective clients to Henley & Partners. Similarly here, Trident Property would receive a 20% commission on the Henley Professional Fee charged to applicants.
Henley & Partners pursued similar agreements with other local developers, including Kempinski’s San Lawrenz and Tumas Group’s Spinola Development.
One signed document reveals that, for the San Lawrenz agreement, Henley Estates would receive 50% from the first month’s rent when the client opts for a lease agreement. On the other hand, an unsigned agreement would see them receive 8% commission on the net revenue gained from the purchase of property.
Another unsigned agreement with Spinola Development allowed for Henley Estates to rake in a 5% sales commission on the total revenue earned through property purchases.
This is a joint investigation by The Malta Independent and MaltaToday along with other partners, coordinated by the Daphne Caruana Galizia Foundation. The production of this investigation was supported by a grant from the Investigative Journalism for Europe (IJ4EU) fund.
Henley & Partners replied to a raft of questions from the collaboration, saying that it is ultimately the responsibility of the countries involved to investigate and vet applicants. Their reply is reproduced in full below:
“Henley & Partners is proud of the service that it has provided to Malta and its people. We assisted the Maltese government in the creation of a remarkably successful sovereign financing and economic innovation platform, raising hundreds of millions of Euros in debt-free capital without which healthcare, social, and cultural investments would not have been possible to make to the extent that they have been in recent years.
The direct injection of debt-free liquidity into a sovereign wealth fund (rather than increasing the debt burden for future generations) has allowed Malta to be more autonomous with its monetary and fiscal policy than would have otherwise been the case. It creates a safety net against the volatility that countries around the world are having to manage, which is particularly damaging to smaller, tourism- and globaltrade–reliant economies such as Malta.
We are fully aware of the potential inherent risks in handling client applications for residence and citizenship and have invested significant time and capital in recent years to create a governance structure that is committed to the highest of standards, with due diligence at its heart.
However, ultimately it is the responsibility of the countries involved to investigate and vet applicants. As a private company, we are neither required by law to do so, nor do we have access to the same level of background information, contacts, and resources that government authorities have. Even so, our processes are well documented and are significantly more advanced than those of the majority of other investment migration industry participants, and they do regularly result in the rejection of potential clients — a position on which we pride ourselves.
It is fundamentally false and potentially defamatory to suggest that there is a systemic problem, or that the programs we are involved in are for nefarious purposes. They are not. In reality, and while we continually strive to do better, proportionately only a very small percentage of applications — significantly less than 1% of all applications over a period of many years — have later been called into question or been found to have been potentially misused, as is evidenced in multiple independent analyses.
We assist hundreds of clients each year to enhance their mobility, personal security, and quality of life, nearly all of whom can be characterized as positive actors who have created businesses, jobs, and significant societal value. They do so additionally by also investing in the countries we introduce them to. Henley & Partners makes a positive contribution to the societies and economies of host countries through this very valuable form of immigration, of which more, not less, is required globally.”