A due diligence report commissioned by Malta Enterprise had warned about Harshawardhan (known as ‘Harsh’) Sabale, the man behind the failed Streamcast investment that left a trail of debt behind after it was awarded what promised to be a multi-million euro project for Malta.
The leaked report seen by The Shift shows Malta Enterprise knew of Sabale’s dodgy past but still went ahead with offering him a lucrative deal for an investment that never materialised. Taxpayers forked out hundreds of thousands of euros for a data centre and got nothing in return.
The report that was in the hands of Malta Enterprise, and could have avoided all this happening, highlights Sabale’s chequered past in failed business dealings and possible clashes with law enforcement in India.
Investigations by The Shift had revealed that the agreement with Streamcast not only failed to produce a multi-million euro investment in Malta, but left a trail of debt and empty promises.
It was also revealed that Nexia BT, the firm that set up the Panama companies for Konrad Mizzi and Keith Schembri, was also involved in setting up Streamcast Group’s venture in Malta. Brian Tonna’s company was involved through a company called Capital Knight Ltd, now one of the companies listed in the court order issued on Monday freezing the assets of senior people in Tonna’s Nexia BT and Keith Schembri and their close relatives together with associated companies, on suspicion of money laundering.
The due diligence report on the man behind the Streamcast deal had warned Malta Enterprise to remain vigilant when dealing with Sabale.
“There are other warning signs to suggest an associate should be cautious in its dealings with him, not least the 2009 arrest of an individual who fits his exact profile. That he is associated with any number of short-lived companies is also presumably highly relevant,” the report states.
The report was presented to Malta Enterprise in December 2017, but officials had, in fact, learned of the report’s findings as early as September of that year.
In November 2017, Enemalta announced the signing of an agreement with Sabale’s company, which had committed to invest €75 million in an international data centre. An official launch of the centre was held in 2018.
The Shift later stripped the Streamcast deal of its hype and showed a company that came from nowhere, without a data centre, infrastructure, funds, prior experience or even a proper website, and how, despite this, they still obtained a sweetheart deal in Malta.
This news portal revealed Sabale’s Streamcast, which was supposed to bring millions of euros in investment to Malta, still owes €500,000 to Enemalta in rent arrears, electricity bills and other expenses. Additionally, the court has ordered Streamcast to pay close to €300,000 in unpaid internet access fees. Yet he seems to have disappeared.
Streamcast also defaulted on a promise of sale agreement of over €7 million, according to a judicial letter and related court case also revealed by The Shift.
Sabale’s project received the backing of the government. Konrad Mizzi, the Minister who was involved in a string of other dubious deals with foreign investors, travelled to Mumbai and attended a press conference about the Streamcast investment. Yet Mizzi just happened to be there, Streamcast said in response to revelations by The Shift. It then proceeded to delete statements from its website and delete its Facebook page.
The leaked report warns Malta Enterprise to have “an informed discussion of his background”.
“HS [Harsh Sabale], 43, has had an entrepreneurial, but unsettled career. Three online CVs present a trail of association with some well-known organisations. Scratch the surface, though, as has been done with this assessment, and some material questions about his provenance arise,” the report states.
Sabale makes things interesting from the very start. He carries business cards with an American address and mobile numbers, but his back story lies in India and the Far East, more than the US.
His past business ventures or employment do not mention Netcast technologies, despite this being cited on his business card, according to the report.
Even Sabale’s simple LinkedIn profile, in which he described himself as an equity investor and technologist, raised eyebrows.
The report refers to a part of his profile in which he says he developed “a globally innovative system for streaming media content on low bandwidth networks” that will impact the delivery of media content across developing countries with poor networks.
His reference to the low bandwidth media streaming venture is Ogle Technologies, a digital-streaming business he sold to an Indian company called Pritish Nandy Communications in June 2014.
The report states that in its 2015 annual report, Pritish Nandy said it had made a partial payment of €35,000 for Ogle, “which is hardly representative of a major investment.”
By 2017, Pritish Nandy had written off its investment.
The report also mentions investment equity funds run by Sabale that never invested any money.
A one-time cricket tournament venture in Hong Kong also failed to impress other partners.
The cricket tournament in 2007 was a success, but articles published in 2008 hinted at problems between Sabale and the Hong Kong cricket board. Later, in 2010, one cricket official said Sabale “over-extended himself”, described him as a visionary with great ideas, “but unfortunately had financial problems.”
The report refers to the arrest of a “chartered accountant” by the Panaji police for cheating a businessman by claiming to be an authority appointed to invest money but allegedly transferred the same amount to his name. The report notes the description bears a striking similarity to Sabale.
Despite these warnings, Malta Enterprise still went ahead with the deal that left a trail of debt behind for taxpayers and private companies in Malta while those involved cashed in.