The Spanish government has bought €20 million worth of face masks from a company owned by a businessman who was involved in two offshore companies registered in Malta.
The country was among the worst hit in Europe by the coronavirus pandemic. The Spanish Ministry for Transport issued a call for tender, without any public announcement, to purchase the masks as part of a prevention campaign against the spread of the COVID-19 virus in the transportation and mobility sector, according to a report by Spanish newspaper El Mundo,
The company that got the contract is run by José Ángel Escorial who set up two companies in Malta: Delta Advisory and Management Services Limited, and Arce Investment Consulting Limited.
Both companies were registered on the same day – 3 September 2008 – and also filed for dissolution on the same day – 10 April 2019. Both companies had the same registered office in Ta’ Xbiex with Escorial seemingly running a one man show.
He was sole shareholder, director and legal representative of Arce Investment. Similarly, for Delta Advisory, Escorial was the sole director and legal representative but split the shareholder position with Arce Investment – his own company.
Spain has registered 170,000 cases of coronavirus so far, which led to around 18,000 deaths. It ranks second in the world, after the US, in the number of positive cases of COVID-19.
The €20 million procurement was made up of three separate tenders issued by three different public entities. The largest amount – €12.5 million – was for a tender issued by ADIF, a State-owned company which manages the Spanish railway infrastructure. The other two tenders were issued through Puertos del Estado (State Ports) and Correos.
The Zaragoza company, owned by Escorial, was awarded all three tenders. It acquired the masks from China. According to the company website, Soluciones de Gestion is “a company that develops and provides technical advice on international health, energy, water and agricultural infrastructure projects, operating mainly in Africa”.
El Mundo’s investigation names Escorial as Chief Executive Officer of Malta Capital, a company in Madrid.
The report also refers to the fact that, although the European Union does not consider Malta as a fiscal paradise, it did have a very “loose tax regime” and “promotes the opacity of investments in its territory”.
The story was carried by a number of Spanish news websites, which queried the reason for awarding the tender to Escorial’s company, which has had no previous experience in the field of health or medical items.
The Spanish government had originally issued a tender for the procurement of eight million face masks on 20 March, six days after it announced a state of public health emergency.
The Transport Ministry decided to regulate the acquisition of protective wear through direct orders and fast-track processing. The eight million masks were intended for personnel working in the transport sector, including taxi and bus drivers to be able to carry out their duties in a safe manner.
El Mundo later reported how the Spanish anti-corruption authorities have been investigating this same company that won all three tenders over corruption allegations in Africa. It appears that the company is mentioned in an investigation report by the Guardia Civil who looked into corruption allegations in the company’s project in Angola.
The 60-page report mentions allegations of bribes to public officials. The company had been contracted to build a food market in Angola. The investigation is ongoing.
Escorial was investigated for tax evasion by financial authorities in Spain. He settled, paying between €60,000 and €90,000, according to reports in the Spanish media which point out the amount was below the penalty set for tax crimes – €120,000.
Spain was among those countries affected by defective masks and protective gear mass-produced by China. Last month, the Spanish Health Ministry withdrew 8,000 Chinese manufactured rapid testing kits that were not up to standard and returned these together with another 50,000 that had not yet been sent out.