Flowers, photos and banners are placed in front of a memorial to assassinated journalist Daphne Caruana Galizia in the Maltese capital Valletta on Oct. 16, 2020. (Joanna Demarco/Getty Images)
A wide-ranging investigation into allegations of high-level corruption on the island was first launched by the murdered Daphne Caruana Galizia, a prominent Maltese journalist, and later extended to the Chinese Communist Party in connection with a $400 million investment in Europe by a Communist state power company, Reuters found.
Caruana Galizia was murdered in October 2017 while investigating a network of companies that she believed paid bribes to Maltese politicians.
Now, Reuters and a group of journalists have tracked down two companies involved in the network, finding relatives of a Communist Party executive at Accenture, a global consulting firm. Chen Cheng, 43, from Shanghai, has spent the past decade negotiating investments in Malta and another small European country, the Republic of Montenegro, on behalf of the Communist Party’s state-owned Shanghai Electric Power, according to Maltese officials and official records.
The revelation of ties to the Chinese Communist Party could add a new international dimension to the scandal that shook the Maltese government and led to the resignation of the prime minister last year; it could also include a series of official investigations into the events that led to the death of Caruana Galizia.
Supported by the Maltese government, Shanghai Power’s investment was defined by Maltese and Chinese political leaders as part of the Communist Party’s multi-trillion dollar “One Belt, One Road” initiative to invest in economic infrastructure in Central Asia and Europe.
In 2016, a year before Caruana Galizia died in a car bomb attack, she confirmed on her blog the key role of Chen Cheng in the deal.
A total of six people in Malta are accused of killing Caruana Galizia and are awaiting trial, but there is no indication that Accenture, Chen or any Chinese companies or individuals were involved in the crime.
Caruana Galizia reports that Chen started a company in the British Virgin Islands in 2014, but for an unknown purpose. That same year, Chen played a key role in the negotiations and due diligence (due diligence) of Shanghai Electric Power’s investment of 380 million euros ($400 million) in the purchase of a stake in Malta’s national power company Enemalta. Caruana Galizia did not specify any misconduct by Chen, and Chen and Accenture did not respond to Caruana Galizia’s report at the Time.
Now, journalists from Reuters, the Times of Malta, the Organized Crime and Corruption Reporting Project and the Süddeutsche Zeitung, the Times of Malta, the Organized Crime and Corruption Reporting Project and Süddeutsche Zeitung all discovered that Chen’s Family had set up two more companies in Hong Kong, both with business ties to Malta.
Reuters reporters contacted Chen and Shanghai Electric Power, but neither was available for comment. In a statement, Accenture said, “As these allegations relate to one of our employees, the Company is taking this matter very seriously and reviewing these allegations carefully. We follow the highest ethical standards in every market in which we operate and have zero tolerance for any deviation from those standards.” Enemalta, for its part, declined to answer questions about Chen.
The Communist Party’s Foreign Ministry spokesman’s office said, “China’s exchanges and cooperation with other countries are open and transparent.”
As Reuters previously reported, the first company Chen’s family set up, called Macbridge, planned to pay up to $2 million to a Panamanian company controlled by two Maltese politicians. The second company, called Dow’s Media Company, received 1 million euros ($1.2 million) from a company owned by Yorgen Fenech, one of Malta’s richest men, according to financial records seen by Reuters. Fenech is currently in prison, awaiting trial on charges of planning the murder of Caruana Galizia, but he has refused to plead guilty.
According to international legal requests seen by Reuters, Maltese law enforcement officials suspect that McBridge & Co. and Dow Media were part of an elaborate conspiracy involving a number of participants in a Communist Party-Maltese deal to pay Maltese politicians and profit from them for themselves. Reuters could not independently determine whether such speculation was correct. Chen did not respond to Reuters’ questions on the matter.
Fenech’s lawyer declined to comment on any relationship between his client and Chen.
The Daphne mystery
Caruana Galizia first discovered the trail of money that eventually led to China in 2016, when she began investigating two mysterious companies that she suspected were being used to bribe politicians, according to her family’s account and work records seen by Reuters.
Little is known to reporters about the two companies in detail beyond their names, “17 Black” (17 Black) Ltd. and McBridge Ltd. In April 2016, Caruana Galizia texted her son Matthew to say she had heard that the companies were “vital to breaking the crime network.
Before that, Maltese officials discovered an email written in December 2015 by an accountant to two senior figures, then Energy Minister Konrad Mizzi and chief of staff Keith Schembri, a close friend of then Prime Minister Joseph Muscat. . The email named “17 Blake” and McBridge as “target clients” who would pay an estimated $2 million to a then-unknown Panamanian company owned by Schembri and Mizzi.
In April 2018, six months after Caruana Galizia’s murder, news of the email broke in local and international media, with Schneebly publicly confirming an “unrealized draft business plan” with McBridge and “17 Black” but denying any impropriety. “but denied any wrongdoing. Last December, he said in a public inquiry into the journalist’s death that McBridge was “mistakenly included” in a December 2015 email.
Earlier this month, Schneebly was accused of involvement in money laundering, forgery and corruption in a case unrelated to the case. He denies the charges and is currently in jail awaiting his first court hearing. He did not comment for this article.
Mitzi said he did not know about McBridge and 17 Blake, or the e-mail. Mitzi has not been charged in any criminal case. In a statement to Reuters, he reiterated his refusal to acknowledge any claims that he had a business plan with McBridge or a personal interest in any public projects. Mizzi said he was aware that Chen was a consultant assisting Shanghai Electric Power and that “my dealings with him were in that official context.”
When Caruana Galizia was murdered, she was also pursuing information on “17 Blake” McBridge, which she believes was the key reason Mitzi and Shibley set up their Panamanian company.
Getting to the bottom of these two companies was really at the heart of her work, and she was determined to unravel the mystery,” recalled her son Matthew Caruana Galizia, who was the first to arrive at the scene of the car bombing.
A year after the assassination, Reuters and the Times of Malta traced “17 Black” Ltd. to a Dubai bank and identified its owner as Maltese tycoon Fenech.
A year later, in November 2019, Fenech was arrested at sea while trying to leave Malta on a luxury yacht. A few days later, he was accused of plotting to assassinate the journalist, but he denied the charge.
McBridge remains a mystery.
Traces on a business card
When police searched Fenech’s apartment, they found the business card of Chen, a consultant for Accenture Consulting.
When detectives interrogated Fenech, the accused mogul solved another mystery. According to interrogation notes reviewed by Reuters, Fenech told police he had information about Macbridge, saying that the name Macbridge means “Malta China Bridge. He gave no further details, and it is unclear whether he was asked about Chen and the business card.
After learning of Fenech’s disclosure, Reuters searched Chinese records and found a company called Macbridge International Development company Ltd, which was registered in Hong Kong on Sept. 30, 2014.
Hong Kong’s company registry did not disclose who owned Macbridge, and the only director was a 65-year-old Chinese woman named Tang Zhaomin. Additional records found in the 11.5 million Panama Papers on offshore companies obtained by the Süddeutsche Zeitung confirm that Tang, operating through a company on the Indian Ocean island of Seychelles, is the ultimate owner of McBridge.
But who is Don? The Panama Papers contain only a grainy copy of her passport, with no address or phone number.
Amateur photographer
Her name was rare, however, and other companies’ databases took reporters to the mainland Chinese city of Shanghai. There, a comment on social media revealed that Tang was an amateur photographer who had worked as a manager for an auto manufacturer and for Yum China, which operates the KFC brand in China. In recent years, she has registered small investments in several local companies.
By tracking her posts on the social media platform Weibo, the reporters made a discovery. Tang claimed to be the mother-in-law of Chen, an Accenture consultant, and referred to herself as “grandma” in front of Chen’s children. A family member later confirmed the Tang-Chen relationship to Reuters.
The reporter was unable to reach Don for comment. Questions posed by reporters to a major outdoor advertising company, where company records show Don is currently a manager and shareholder, were not answered.
A Reuters reporter then traveled to Nanjing, 180 miles from Shanghai, which proved to be more useful. The purpose of his trip was to visit a restaurant company where public company records show that Tang is a shareholder. The company’s headquarters turned out to be a KFC franchise, located in a shopping center, serving American fast Food with a Chinese twist: a fried chicken combo for about 40 yuan ($6) and jelly durian fruit balls.
The visit proved a new connection between her and Accenture executive Chen, as well as Malta. An employee at another nearby KFC owned by Tang’s partnership said she did not know Tang Zhaomin, but knew the other partner, a woman named Wang Rui. The employee said Wang was the owner of the catering company, but that she rarely went to KFC.
Records show Wang Rui is a director of a Hong Kong company called Dow Media, which was formed in 2014, two weeks before McBridge was founded. Jorgen Fenech’s 17 Blake paid €1 million to Dow Media Inc. in 2016, according to bank records seen by Reuters.
Based on the phone number provided by KFC staff, the reporter reached Wang Rui. She told Reuters that she is a cousin of Tang Zhaomin, who is Chen’s mother-in-law. She said she had set up Dow Media at Chen’s request for his purposes and knew nothing about the 1 million euros or Dow’s activities.
Wang said, “He asked me to set up the company and I didn’t think there was anything wrong with doing that, and he told me the company could do media-type work.” She added that at the time, Chen told her he could not start the company on his own because of his relationship with a state-owned company. Wang did not reveal the name of the company or elaborate on it.
Investigators in Malta are also tracking Dow Media Inc. and McBridge & Co. In international legal requests that Reuters has reviewed, they found information about the company’s business activities, financial flows and ultimate owners. In a 2018 request through Interpol, Maltese police questioned the CCP about Dow Media and the €1 million the company received from Fenech’s 17 Blake in 2016. Maltese police said the money could involve “illegal funds” and could be linked to “corruption and money laundering. A Maltese official said there was no record of a response from the Chinese Communist Party. The Communist Party’s Foreign Ministry spokesman’s office said it was unaware of the matter.
Malta has also submitted legal requests to the United Arab Emirates for information regarding possible payments from McBridge to Maltese politicians Schneebly and Mizzi. The requests also cited possible corruption as well as money laundering. The UAE told Malta that they had found no trace of McBridge’s company.
Payments
In June 2020, Reuters and the Times of Malta revealed that Fenech’s 17 Black had secretly profited $5 million from a wind farm project in Montenegro involving Shanghai Electric Power and Malta’s national power company, Enemalta, which Chen had promoted in a report to Enemalta’s board of directors, according to Enemalta’s internal audit.
In 2016,17 Black & Decker earned $5 million in profits from the wind farm. Two weeks before the payment date, in May of that year, Fenech’s company made the first of three payments to Dow Media, and two months later, a total of €1 million, according to bank records seen by Reuters and requests made to China by Maltese investigators through Interpol.
According to Accenture’s ethics manual, Chen’s disclosure of private business information could have gotten him into trouble at Accenture, where he had served as a director in its energy business. Accenture does not completely prohibit its employees from having private business interests, but it does warn of possible conflicts of interest, including using Accenture information or positions “for personal gain (or for the benefit of their family or close friends).
Asked about Chen’s ties to McBridge & Co. and Dow Media, and his relationships with Maltese business and political figures through those companies, Accenture said it was carefully reviewing the allegations. Shanghai Electric Power did not respond to questions about Chen’s role, and an Enemalta spokeswoman said that following an internal audit of the wind farm deal, “the report has been forwarded to the police to assist in any investigation and any further comment at this stage would be imprudent.”
Swiftly Launching Investigations
In Malta, revelations of ties to the Chinese Communist Party could trigger a series of official corruption investigations, including a public inquiry into the events leading to the death of Caruana Galizia, a judicial inquiry into 17 Black, a judicial inquiry into the Montenegrin wind farm deal, and investigations by the Malta Police Service’s Financial Crimes Unit into 17 Black, McBridge and broader corruption allegations conducted by the Financial Crimes Division of the Malta Police Service.
In the Republic of Montenegro, a judicial investigation was triggered by a Reuters expose last year on 17 Black’s role in wind farm financing. The same report also led to the expulsion of former Energy Minister Conrad Mizzi from the Malta Labour Party. Former Maltese Prime Minister Joseph Muscat has said he is not aware of any business dealings between Mizzi and Shibley.
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