Keith Schembri linked firms still secure government tenders

Keith Schembri, once the powerful chief of staff to former prime minister Joseph Muscat, remains a figure of public attention and controversy in Malta. Although he has faced extensive legal proceedings, including charges of money laundering, fraud, and misappropriation of funds, his business connections continue to play a role in the public procurement landscape.

Recent disclosures show that Schembri’s companies, even under the restrictions of a court-imposed freezing order, remain active in winning significant public contracts. Most notably, his paper importation business continues to supply institutions such as the University of Malta and the Malta College for Arts, Science and Technology (MCAST).

This ongoing commercial activity, combined with past links to state contracts, raises questions regarding procurement rules, oversight, and the intersection of business and politics in Malta.

Ongoing contracts despite restrictions

According to records published in the Government Gazette, in May 2025 Kasco Ltd, the company most commonly associated with Schembri, was awarded tenders worth more than €170,000. These tenders concerned the supply of photocopy paper to the University of Malta and MCAST, two publicly funded higher education institutions.

University sources expressed concern about this situation, highlighting reputational risks. One official commented:

“Somehow, Kasco always manages to beat its competitors in price, and by law, we are bound to choose the lowest offer.”

The statement reflects the legal framework governing procurement: unless a company is legally blacklisted or disqualified, it remains eligible to compete for and win government tenders. The existence of freezing orders does not automatically exclude a business from such processes.

Legal framework surrounding freezing orders

A freezing order is a precautionary measure imposed by the courts to restrict an individual or company from disposing of assets while investigations or criminal proceedings are underway. Importantly, this does not amount to a conviction and does not necessarily halt day-to-day operations of a business.

In Schembri’s case, the freezing order allows Kasco and other linked companies to continue operating. They are permitted to participate in public procurement procedures unless or until a final judgment is delivered, or specific blacklisting measures are applied.

This legal distinction explains why Kasco remains an active participant in government tenders. While the legal cases against Schembri and associates continue, institutions are bound to follow procurement rules and cannot exclude a company simply because of ongoing investigations.

Historical context of business ties

Schembri has long been involved in the paper importation sector, with Kasco being a major supplier in Malta for decades. During his tenure as chief of staff between 2013 and 2019, his companies frequently secured large contracts and direct orders from the government.

At the time, questions were raised about potential conflicts of interest, given his senior position in the Office of the Prime Minister. Schembri maintained that he had distanced himself from the day-to-day operations by transferring responsibilities to his father, Alfio Schembri. However, subsequent investigations also implicated his father in connection with certain business dealings, and court proceedings were initiated.

Recent procurement and direct orders

Beyond the recent tenders to the University of Malta and MCAST, Schembri’s companies have also been awarded direct orders by other public entities. For example, the Water Services Corporation reportedly acquired its paper supplies from Kasco through such a process.

This continuity demonstrates that despite the legal and political controversies, Kasco maintains competitiveness in its field. Price competitiveness and long-standing experience in paper importation appear to play a role in the company’s ongoing success in public procurement.

Ongoing criminal proceedings

In 2021, Schembri was formally charged with multiple offences, including money laundering, fraud, and misappropriation of funds. These charges followed investigations by the police and the Financial Intelligence Analysis Unit (FIAU). While the court proceedings are ongoing, Schembri has denied wrongdoing.

Legal experts note that until a court delivers a final verdict, individuals and companies retain their legal rights, including the presumption of innocence. Consequently, institutions procuring goods or services from companies linked to Schembri are operating within the bounds of the law.

The Allied Newspapers case

One of the most significant investigations linked to Schembri concerns his long-standing business relationship with Allied Newspapers, the publishers of The Times of Malta. An FIAU report suggested that Kasco had supplied millions of euro worth of newsprint to the company over several years.

The report further alleged that two former Allied managing directors, Adrian Hillman and Vince Buhagiar, may have received improper benefits in connection with these transactions. Both Hillman and Buhagiar were charged in court but pleaded not guilty. The proceedings remain ongoing, and no final judgment has yet been delivered.

The case illustrates the broader network of relationships between Schembri’s companies and key sectors of Maltese society, including the media.

Reputational implications for public institutions

The University of Malta and MCAST, as state-funded institutions, are highly visible symbols of national education policy. Their procurement practices are therefore subject to heightened scrutiny.

Officials within the University acknowledge the difficulties of continuing business relationships with a company linked to an individual facing criminal charges. However, procurement law obliges them to award contracts to the lowest compliant bidder, unless there is a legal disqualification.

This situation highlights the gap between legal requirements and reputational concerns. Even when a contract is awarded in full compliance with the law, public perception may view the continued association with controversy as problematic.

Wider implications for governance

The persistence of Schembri’s companies in securing contracts despite ongoing legal proceedings raises broader questions about governance and accountability.

It underscores the importance of clear rules regarding blacklisting and eligibility in public procurement. While the presumption of innocence is a fundamental principle of law, the reputational and ethical dimensions of awarding contracts to companies linked to high-profile legal cases remain an area of debate.

Observers suggest that Maltese institutions may need to consider reforms that balance the need for fair competition with the protection of public trust in state procurement.

Conclusion

The case of Keith Schembri and Kasco illustrates the complex intersection of law, politics, and business in Malta. While legal proceedings continue, and no final judgments have yet been issued, the company remains active in public procurement, supported by its competitive pricing and market presence.

At the same time, questions persist about how public institutions should navigate the tension between legal compliance and reputational considerations. The outcome of the ongoing trials, and any reforms to procurement regulations, will determine how such cases are handled in the future.

Frequently asked questions

What is Kasco Ltd?
Kasco Ltd is a Maltese company engaged primarily in paper importation and supply, long associated with Keith Schembri and his family.

Why is Kasco still winning tenders?
Kasco continues to win tenders because procurement law requires institutions to choose the lowest compliant bidder unless the company is legally disqualified.

What charges is Keith Schembri facing?
Schembri has been charged with offences including money laundering, fraud, and misappropriation of funds. The cases are ongoing.

Does the freezing order stop Kasco from operating?
No. A freezing order restricts disposal of assets but does not prevent companies from continuing day-to-day operations or bidding for contracts.

Which institutions buy from Kasco?
Recent records show that the University of Malta, MCAST, and the Water Services Corporation have purchased paper supplies from Kasco.

What was Schembri’s role in government?
He served as chief of staff to former prime minister Joseph Muscat between 2013 and 2019, a role that gave him significant political influence.

Has Schembri been convicted?
No. Schembri has not been convicted. All charges remain under court proceedings, and he maintains his legal right to the presumption of innocence.

What is the Allied Newspapers case about?
The case involves allegations that Kasco supplied large volumes of newsprint to Allied Newspapers under questionable conditions. Two former directors are facing related charges.

Why can’t institutions refuse to buy from Kasco?
Public institutions are bound by procurement law, which requires them to accept the lowest eligible tender offer. Without a legal basis, refusal could breach regulations.

What are the implications for Malta’s governance?
The case raises concerns about how procurement systems handle companies under investigation, highlighting the balance between legal rights and public trust.