Galdes warned to ‘stop digging’, refuses to publish Chair’s resignation letter

Housing Minister Roderick Galdes is facing intensifying scrutiny after refusing to release the resignation letter of Malita Investments plc’s recently departed Chair, amid deepening concerns over political interference and the financial fragility of the state-backed property vehicle.

Sources told The Shift that the letter submitted by Johan Farrugia, who stepped down earlier this week, contains blunt criticisms of the company’s management before his appointment. It is also understood to detail external pressures of a potentially criminal nature on both the company and its Chair, which ultimately prompted his exit only months after Galdes installed him in the role.

The minister has not responded to questions on why the Chair he personally appointed has resigned, nor on why he has refused to publish the letter.

Galdes has come under mounting pressure to account for Malita Investments’ deteriorating finances, 20% of whose shares are publicly held and listed on the Malta Stock Exchange.

The company is reportedly struggling to meet multi-million-euro obligations to contractors on major housing projects, raising concerns about near-insolvency.

Farrugia, a young financial services lawyer described as “serious and upright”, was appointed after Galdes removed former Chair and Labour MEP Marlene Mizzi in 2024.

His abrupt departure on Monday, following allegations of political interference, growing debts and operational mismanagement, was disclosed only in a regulatory announcement the following day, which also named former tax commissioner Marvin Gearty as his successor.

Gearty has previously been the subject of police investigations over his ties to business figures facing tax evasion and money-laundering charges, though no charges were ever filed against him.

No explanation has yet been provided for Farrugia’s sudden resignation.

Meanwhile, both the National Audit Office and the Standards Commissioner have been requested to open inquiries into allegations of ministerial interference in Malita’s operations.

Former Malita Chair Marlene Mizzi has publicly criticised the minister, warning him to “stop digging”. She maintained that the company was financially sound at the time of her departure and has accused Galdes of attempting to influence the governance of a listed entity and “hobnobbing” with contractors involved in social housing projects.

Galdes has rejected Mizzi’s claims but has not explained the scale of Malita’s current financial difficulties, nor indicated who will be held accountable.

Earlier reporting by The Shift revealed that a €44 million social housing development in Ħal-Farruġ, Luqa, has stalled, with contractors walking off-site after payment delays by Malita to settle outstanding bills.

Other directors on Malita representing the government include the President of the General Workers Union, Victor Carachi, Tania Brown,  assistant to former Minister Edward Scicluna who was indicted over the hospitals scandal, and Miguel Borg, forced to resign from a senior position at Bank of Valletta following a multi-million-euro loan given to the now defunct Steward Health Care.