News • November 2 2003

Breaking BICAL – how controllers dismembered Pace’s empire

• Jablo Plastics, later renamed Marsa Plastics, with an overdraft at BICAL of Lm22,127 on 25 November, 1972, comprises of a factory, well-equipped with machinery, ample stocks of raw materials and finished products, with a business edge on local and foreign markets. But KMB does not rid the company of its debts, and instead is kept functioning and debts amass, loaning monies from the BICAL assets to the company. Bonello sells Marsa Plastics for Lm140,000 in 1991 when the company has a total asset value of Lm595,086.
• A classic example of KMB’s ruthless treatment of the BICAL assets is the Comino Hotel. The Pace family had invested Lm400,000 in the Comino Hotel on the island of Comino, which carried an emphytheusis for 150 years at Lm12,000 a year. When the company was seized, the hotel was valued at over Lm1.5 million. In order to dispose of the annual rent of Lm12,000, Karmenu Mifsud Bonnici returns the hotel to its landlord John Gaul for free, losing an investment of hundreds of thousands of liri.
• Pace's Marsa Industries included two big storehouses which contained joinery machinery. It also incorporated yachts used for harbour and round-Malta cruises. Despite being worth five times the amount, the storehouses were sold for just Lm7,500.
• The yachts ‘Comino,’ ‘Verdala’ and ‘Maria Louisa’ - valued in excess of Lm90,000 - were sold for a measly Lm7,400. The motor yachts ‘Roberta,’ ‘Michael,’ ‘Celia’ and ‘Sayonara Hago’ were sold as a going concern in 1976 to John Sullivan's Sunsea Cruises Ltd for the fine sum of Lm39,500, despite their value of over Lm100,000. When Sullivan paid the initial deposit of Lm20,000 for the boats, Karmenu Mifsud Bonnici never bothered to collect the remaining Lm19,500. Only in 1987, was Sunsea Cruises ordered by the Commercial Court to repay the outstanding amount plus interest, and to this day no controller has ever told the Pace family whether the money was actually paid, or not. Likewise, the ship ‘St Rule’ was sold for a ridiculous Lm4,800 in 1973, whilst the ‘Maltese Trader’ was sold for just Lm14,500.
• Cecil Pace owned a number of prestigious hotels, ranging from the Castille Hotel adjacent to the office of the Prime Minister and the Grand Hotel Excelsior. Both were favourites with the business community of the time. Other smaller hotels included the Patricia and Capua Court hotel in Sliema, the Olympic hotel in Paceville and the President hotel in Ta’Xbiex, still unfinished when Pace was taken into custody in 1973. The latter hotel, today the site of the Les Lapins hotel in Ta’ Xbiex, a footprint of which covered sizeable ground, was sold for only Lm115,000 to Golden Bay Hotels Ltd in 1981. However, Lm16,200 of this money was paid to the Commissioner of Lands for ground rent arrears. A special arrangement allowed the purchasers to start payment for the remaining Lm98,000 in 1985 over a period of two years, without interest. Four other hotels - the Comino hotel, the Patricia hotel, Capua Court and the Castille hotel - had been purchased by President Hotels Ltd for a combined value of Lm825,000. At least Lm149,000 had been additionally spent on improvements within the Castille and Comino hotels upon purchase.
• The Castille hotel was sold for Lm115,000 in 1979. Its movable fixtures and furniture were sold separately for the measly sum of Lm15,000. According to controller Emanuel Bonello’s progress reports on the BICAL associated companies, the hotel had been valued at Lm330,000 in 1970.
• The Capua Court hotel had been valued at over Lm400,000 in 1970 when the hotel was transferred from Hugo Pace and Sons Ltd to BICAL’s President Hotels Ltd. Capua Court was consequently sold to the Zammit Tabona business group for Lm205,000, payable over ten years without interest.