Malta Today
This Week Sport News Personalities Local News Editorial Top News Front Page This Week Sport News Personalities Local News Editorial Top News Front Page This Week Sport News Personalities Local News Editorial Top News Front Page


powered by FreeFind

Malta Today archives

News • August 22 2004

Authorities declare Gaming Chief Executive is free of conflict of interest

Matthew Vella

No suspicions, and no conflict of interest. This is the government’s declaration on whether Mario Galea, the CEO of the Lotteries and Gaming Authority, has indeed disposed of a private shareholding in a transparent manner and avoided any form of conflict of interest in his position as a public official, by selling his shareholding to a nominee company.
But outside the orbit of Malta’s leading internet gaming service provider Bell Med Ltd, reputedly the technical service provider of choice for 70 per cent of Maltese-registered internet gaming operators, questions are asked of whether Galea, formerly the owner of Bell Med,
has indeed disposed of his interests in the company in a way that places him above suspicion.
The world of I-gaming in Malta today has attracted 14 operators from outside the island, mainly through the favourable tax regime in place, in which a host of legal and accountancy firms, as well as IT firms, have flocked to take advantage of the foreign operators setting up shop on the island, of which at least half are focused on sports betting.
Bell Med Ltd has by far enjoyed successful growth having been the first company on the island to service internet gaming operators. Created to promote internet gaming in Malta back in 1996 by the then Malta Financial Services Corporation, Malta Stock Exchange and Computer Aided Technologies (CAT) – a company fully-owned by Mario Galea – Bell Med Ltd became the property of CAT in 2002.

Averting conflicts
One of the architects of the Maltese online gaming regulations of 2000 and 2003, Galea’s appointment to CEO of the Lotteries and Gaming Authority earlier this year placed him at loggerheads with his private financial interests.
As CEO, Galea is the person responsible for the issuing of gaming licences to operators. In April 2004, MaltaToday enquired about a possible conflict of interest for Galea, a public official, who had not yet disposed of his shareholding in Bell Med Ltd: having direct access to all gaming operators applying for licences, his 100 per cent shareholding in Bell Med Ltd, which services gaming operators, could prove to be conflicting.
Speaking to this newspaper earlier in April, Galea, who had been in charge at the Lotteries and Gaming Authority since February 2004, said he had been instructed to remove his shareholding from Bell Med as part of his appointment to CEO.
On 10 May 2004, Mario Galea officially resigned from company director at CAT and was superseded by Bell Med’s director Ian Curtis.
Today Galea is no longer the director-shareholder of CAT. But who today is in fact the real owner of CAT, and for that matter Bell Med Ltd, is something that will be left out of the public eye.
Mario Galea did indeed dispose of his shareholding in CAT four months after his appointment as CEO to a nominee company called Knights Corporate Business Ltd on 8 June 2004, just days before travelling to London to represent the Lotteries and Gaming Authority at the Virtual Gaming Forum, a premier showcase for the European I-gaming industry.
Accompanying him to the forum would have been Nationalist MP Michael Frendo now Foreign minister who according to the Virtual Gaming Forum brochure, was mentioned in the line-up of speakers, in this case representing Gatt Frendo Tufigno Advocates, which assists clients in setting up remote gaming operations.
Knights Corporate Business Ltd is in fact the nominee company which appears under the directorship of Gatt Galea & Co’s senior partners: Richard Galea, Franco Privitelli and Raymond Gatt, the latter also the Controller appointed by the Ministry of Finance for the BICAL bank. The accountancy firm is in fact another player in the I-gaming industry, assisting in the creation of international trading companies for internet gaming operators.
And like all nominee companies, Knights Corporate Business is a legal structure for trustees to act on behalf of clients which do not wish to have their names appear on paper. As directors of Knights Corporate Business, Gatt, Galea and Privitelli appear as the trustees for whoever owns Computer Aided Technologies, and for that matter, Bell Med Ltd.

Castille ok’s Galea
Mario Galea’s divestiture to Knights Corporate Business has not raised any eyebrows at the Ministry of Finance. Galea is declared by Prime Minister Lawrence Gonzi as having “no interest in any business, employment, consultancies, fiduciary positions, representations or other interest whether financial or otherwise, in any business firm, organisation, company or other entity”.
“The documents that have been provided,” the PM’s office told MaltaToday, “including a declaration of interests, indicate that there is no conflict of interest with Mario Galea’s position as CEO of the LGA… Knights Corporate Business Ltd registered the transfer of shares to their licensed nominee company. From the documents provided, there is no connection between Mario Galea and Gatt, Galea & Co accountancy firm… The transfer of Mr Galea’s shareholding CAT to a nominee company has been made according to all legal provisions and does not give rise to any suspicions…”
But what about passing the test of being “above suspicion”? An authority in IT engineering, Mario Galea has been at the forefront of internet gaming solutions since the very creation of Bell Med in 1996, before his Computer Aided Technologies purchased all the shares in the company. A leading consultant in the gaming industry, he was a key person involved in the introduction of Maltese online gaming regulations in 2000 and 2003 with the Ministry of Finance.
Appointed CEO of the Lotteries and Gaming Authority in February 2004, the post had been previously left vacant since September 2002: the first selected candidate had in fact declined the post before actually taking it up in December 2002. When the other applicants shied away from the post, a fresh call for applications was issued in September 2003, and Mario Galea was appointed CEO. Engaged on a five-year definite contract, Galea’s salary will not be divulged by the Ministry of Finance.





Newsworks Ltd, Vjal ir-Rihan, San Gwann SGN 02, Malta