Aqra bil-Malti

The man behind what can only be described as a scam in Malta that robbed taxpayers and service providers of funds intended for a data centre supported by Enemalta and the government has been arrested in India and denied bail.

The Shift revealed in 2020 that while the government had announced an investment of €5 million by Streamcast that would increase to €75 million, this never happened. Instead, the company left a trail of debt.

Then-Enemalta Executive Chairman Frederick Azzopardi had described the deal as “marking a new era of growth for [Enemalta] and [Streamcast].”

Meanwhile, companies were set up in Malta that profited from the deal, including the now-defunct Nexia BT, whose owners are facing criminal charges related to the Panama Papers and the public hospitals deal.

Harshawardhan Sabale was the promoter of Streamcast Technologies. He now stands accused in India of cheating another company of $1.5 million. He has been denied bail.

Reports on court proceedings show Sabale allegedly created a fake e-mail ID of a bank in Mauritius, sent numerous emails from it, and provided forged documents of different banks giving false assurances.

The complainant is Rolta Infotech Ltd, which acquired shares in the company. It said it was induced to invest $1.5 million in Streamcast based on false promises.

Public announcements in India show Streamcast Group was sold off in pieces to two other companies, Iris and Rolta.

Meanwhile, the company was renamed Varanium Cloud Limited. The company and its promoter and managing director, Sabale, were banned from the securities market by the financial regulator SEBI.

As per the SEBI order, the company allegedly misused its initial public offer (IPO) proceeds and used dubious transactions to paint a false picture of good financial health and promising growth prospects.

They promoted the Malta project to shareholders. In an online meeting with shareholders in 2023, when things had already gone south in Malta, Sabale addressed shareholders’ concerns by telling them the reports from Malta, which were published by The Shift, were all a political exercise, repeating the government’s claim on major scandals revealed by this newsroom.

Harsh Sabale’s post on Instagram at the time the Streamcast deal was being negotiated.

What happened in Malta

Streamcast was lauded in 2018 as ‘a major international company’ that would invest €75 million in the launch of an international data centre in Malta.

The government announcement, made with the usual hype, was in fact nothing more than a deal with an Indian and his partners that actually had no data centre, no infrastructure, no funds, no track record and not even an essential website.

The Shift published a report that showed that the due diligence exercise by Malta Enterprise revealed this. But the deal was still sealed.

Enemalta gave them the premises for the data centre, which Streamcast equipped. Yet the result was a pile of debts and no return for Malta’s taxpayers.

Streamcast left a trail of debt: Enemalta was owed €500,000 in rent arrears, electricity bills and other costs, while Melita was owed another €300,000 for fibre optic connections and internet usage. Streamcast also defaulted on a promise of sale agreement for a property valued at €7 million.

Court documents show Enemalta suing Streamcast for unpaid bills over two years.

Meanwhile, Nexia BT, whose owners are facing criminal charges in other corruption scandals, invested in the deal. Capital Knight Ltd, Nexia BT’s company, acquired just over 400,000 shares (for the princely sum of $4.41) or 0.22% of the holding company.

A promotion blitz followed, funded by taxpayers, which increased the value of the shares and allowed Nexia BT to cash in.

Maltese company, Capital Knight Ltd, subscribed for shares in Streamcast’s Irish holding company. The Maltese company is owned by Nexia BT partners Brian Tonna, Karl Cini, Manuel Castagna and Oliver Said.

The usual suspects helped build the hype. Disgraced former minister Konrad Mizzi went on a marketing trip to Mumbai and attended a company press conference.

Michelle Muscat, the wife of disgraced former prime minister Joseph Muscat, who is also facing criminal charges in relation to the fraudulent hospitals concession, also helped promote the scam by attending a glitzy affair – the launch of the Malta India Film Awards.

Streamcast Group, with then-minister Konrad Mizzi, organised the ‘Malta India Film Awards’ in which Nexia BT got a speaking slot on ‘incentives in Malta’.

Brian Tonna and Karl Cini, also facing criminal charges, even gave a 30-minute speech at the festival about incentives in Malta.

The Streamcast project was a bubble created for those involved to make money on hype, but Malta taxpayers got nothing. The court case in India shows investors there were also dealt a bad hand.

This article was brought to you with the support of the Daphne Caruana Galizia Foundation.