Malta’s financial services regulator, the MFSA, issued a significant €2.7 million direct order last July to a small UK-based company specialising in online reputation management.

Despite the direct order’s high value, the MFSA has been reticent to explain why such a substantial contract was not awarded through a competitive tender. Additionally, it has not clarified the exact scope or duration of the contract or why no local companies were approached first.

Details of the €2.7 million direct order to Digitalis UK Ltd, based in London, recently appeared in the Government Gazette, as public procurement rules dictate.

The direct order indicates that the order is related to the “procurement of International Branding Services.”

Digitalis, located in London, employs 50 people, and its chairman, Mark Wood, is a former CEO of AXA UK. The MFSA already spends tens of thousands of euros annually on positive media coverage in various international jurisdictions.

Asked by The Shift to explain the necessity of such a large direct order to a foreign company and whether it was aimed at managing Malta’s ‘problematic’ reputation as a financial services centre, the MFSA avoided responding to specific questions.

It also did not explain why an international competition was not considered, which is typically standard practice for such services.

While clarifying that there is no Maltese intermediary in the transaction since the UK company does not appear to have Maltese agents, an MFSA spokesman explained that the Authority acted as a buyer on behalf of another organisation.

“The MFSA agreed to contract on behalf of the Malta Financial Services Advisory Council (MFSAC) for the services provided by Digitalis. MFSAC is a collaborative initiative between the financial services industry and various government authorities. Its ultimate aim is to support the delivery of the strategic objectives of the Malta Financial Services Advisory Council and the broader National Strategy for Financial Services,” the spokesperson said.

The MFSA did not provide specifics when asked. Instead, the spokesperson said that “a fundamental part of our job is to consult with and engage both local and international actors to ensure that the financial services sector in Malta is not only world-class and operates to the highest standards but is also recognised for those standards in a highly competitive international landscape.”

MFSAC Chair Joe Zammit Tabona.

Established in 2021, the Malta Financial Services Advisory Council is chaired by businessman and former auditor Joseph Zammit Tabona, a former Malta High Commissioner in London with valuable connections in the UK financial services industry.

MFSAC includes representatives from private financial services providers and regulatory authorities, such as the MFSA, Finance Malta, the Financial Intelligence Analysis Unit, the Malta Stock Exchange, and the Malta Business Registry.

In 2023, the council launched the National Strategy for Financial Services, aimed at enhancing Malta’s financial services sector. In recent years, Malta has faced negative perceptions in the industry, resulting in its greylisting by the International Financial Action Task Force (FATF).

The greylisting was lifted in 2022 as Malta took action to address deficiencies in tackling tax evasion and the listing of ultimate beneficiary owners in the country.