AUM slapped with €1.1 million garnishee over case filed against them by former lawyer

The American University of Malta (AUM) has been slapped with a garnishee order worth €1.1 million over a case filed against them by their former lawyer Louai Aziz Michael Al Twal, The Malta Independent on Sunday can reveal.

The application for the garnishee order was filed before Judge Grazio Mercieca by Al Twal.

The Malta Independent on Sunday is informed that, as per procedure, all Maltese banks have been served with a notice from the courts, requesting them to freeze any assets they might have which belong to Sadeen to the tune of €1.106 million.

Al Twal, who is Jordanian, was the legal representative for Sadeen, and frequently appeared in media appointments relating to the company, when the project to turn their premises in Cospicua into the university was still in its infancy.

In fact, he was one of those present at the signing of the contract between the Maltese government and Sadeen at Castille in May 2015.

Relations between Sadeen and Al Twal seem to have soured since, however.

The company’s accounts for the year ending 2019 make mention of the possibility of the company having to make such a payment, stating in its contingent liabilities section that a judicial letter was filed against the company and its ultimate shareholder on 22 January 2020 claiming a payment of €1,206,455 for “alleged legal services”.

The accounts state that the company was rejecting the claim as unfounded, and no provision for this case or another case mentioned in the accounts was made in the company’s financial statements.

This newsroom can also reveal that Al Twal filed a case against Sadeen’s main shareholder Hani Salah in Malta’s civil court before Judge Francesco Depasquale where he is seeking payment from Salah.

This case was registered on 17 February this year – just four days ago.

The case and the possibility that Sadeen will be forced to pay out over €1 million if they do lose it will no doubt be a concern for the company, especially given its financial performance over recent years.

Last December, The Malta Independent on Sunday revealed that the company had racked up a total of €11.27 million in losses in the space of two years: €5.37 million in losses in 2019 and another €5.89 million in losses in 2018.

With only €458,023 generated in revenue from tuition fees in 2018 and 2019, the company which runs AUM has had to rely on the benevolence of its shareholders to continue to function, and the financial situation of the company led to its auditors to indicate “the existence of a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern.”

This being said, the company’s accounting report for both 2018 and 2019 reads that the company’s ultimate shareholder “has written to the directors outlining his comment and ability to continue to fund all losses and commitments of the company as and when the need arises.”

This is reflected in answers which the AUM provided to this newsroom in response to questions on the educational institution’s financial sustainability.

“AUM is totally committed to Malta as a long-term project. Despite any losses, also due to the current situation, we will continue to invest in our campus”, AUM Provost Professor Narcisa Roxana Most ea nu had told The Malta Independent on Sunday.

The much-vaunted AUM was announced by Joseph Muscat’s government in May 2015, with the intention of rejuvenating the dock area in Cospicua. It was officially established in September 2016 and welcomed its first batch of students in September 2017. The agreement saw the Dock 1 campus transferred to AUM, where the university has carried out extensive rehabilitation works and where it currently operates. A sizeable plot of land at Zonqor point was also part of the controversial agreement, however former Prime Minister Joseph Muscat said that the project there will only start when the Cospicua campus is full.

As of October 2019, only 143 students were enrolled at the University, and AUM has failed to answer questions from this newsroom on how many students it currently hosts.

AUM is totally committed to Malta as a long-term project