Chen Cheng

 

https://euobserver.com/world/151397

 

A Chinese executive at a global consultancy firm was at the centre of suspected Maltese corruption schemes linked to the murder of journalist Daphne Caruana Galizia, according to an investigation.

Chen Cheng, a 43-year old from Shanghai, is a ‘managing director’ in Accenture’s energy division.

He also negotiated investments in Malta on behalf of Chinese state firm Shanghai Electric Power.

And his proxies created two shell-firms – ‘Dow’s Media Company’ and ‘Macbridge International Development’ in Hong Kong – which were used in suspected corruption schemes involving top Maltese officials, according to a joint probe by Reuters, the Times of Malta, the Organised Crime and Corruption Reporting Project, and German newspaper Süddeutsche Zeitung, published on Monday (29 March).

Shanghai Electric Power ended up publicly investing €380m in Maltese energy firm Enemalta.

Meanwhile, Dow’s and Macbridge were used to secretly funnel millions of euros together with another shell-firm, ’17 Black’ in Dubai, which was linked to Maltese government officials involved in the Shanghai Electric Power deal.

The officials were the prime minister’s former chief-of-staff, Keith Schembri, and former energy minister, Konrad Mizzi.

Schembri is currently facing corruption charges in a separate case, while Mizzi left government.

The group of European newspapers and journalists uncovered Chen’s Hong Kong-based firms after consulting Maltese police documents, the leaked ‘Panama Papers’ trove of company records, and other sources, including interviews in a ‘KFC’ restaurant on a fact-finding trip to Nanjing in China.

They did it as part of efforts to continue the work of Maltese journalist Daphne Caruana Galizia, who was killed by a car bomb in 2017.

There was no suggestion that Chen was involved in her murder.

But she had been investigating his role following a tip-off by a Maltese official when she was assassinated.

And a Maltese tycoon, Yorgen Fenech, who owned the ’17 Black’ firm in the China-energy scheme, has been charged with ordering her killing.

“Working out the truth of those … companies was really at the centre of her work. She was determined to get to the bottom of that mystery,” Daphne Caruana Galizia’s son, Matthew, told Reuters.

“We call for fresh charges to be pressed against Yorgen Fenech, Keith Schembri, and Konrad Mizzi and for Chen Cheng to be extradited to Malta to face justice,” the Daphne Caruana Galizia Foundation, an NGO in Malta, also said.

It called for Schembri’s former boss, the then prime minister Joseph Muscat, to face fresh scrutiny.

And it accused Accenture of complicity, saying it had “known about Chen’s implication in corruption and illicit offshore dealings”, but “has chosen to retain him, suggesting that his actions are endorsed by his employer”.

The revelations come at a tense time in EU-China relations, involving tit-for-tat sanctions over Chinese human-rights abuses.

They also risk causing a stink around China’s flagship international investment scheme, the ‘Belt and Road Initiative’, of which the Chen-brokered Shanghai Electric Power deal in Malta was part.

The Maltese police, using Interpol, asked China about Dow’s Media Company back in 2018 regarding “illicit funds” linked to “possible corruption and money laundering,” according to documents seen by the investigative project.

They also made similar enquiries to the United Arab Emirates, but got nothing in return.

“China’s exchanges and cooperation with other countries are all open and transparent,” the Chinese foreign ministry also told the investigative project.

Mizzi, the former energy minister, said he knew Chen only in his “official” capacity as a representative of Shanghai Electric Power.

Accenture lets its executives have legitimate side-jobs.

But it said we are “carefully reviewing these allegations as they relate to one of our people. We adhere to the highest ethical standards in every market in which we operate and have zero tolerance for any deviation from those standards”.

Shanghai Electric Power and Chen, as well Schembri and Fenech’s lawyers, declined to comment.

The trial of Caruana Galizia’s killers ended in February and her family is satisfied it fingered the right man – Fenech – as the mastermind of her assassination.

But there is still an ongoing public inquiry into the wider political context of the events, which scarred the image of the EU micro-state.

There are also two judicial enquiries and an ongoing police investigation into the Chen-linked corruption schemes.

BACKGROUND: Reuters Special Report – Money trail from Daphne murder probe stretches to China

 

https://www.reuters.com/article/us-malta-daphne-china-specialreport/special-report-money-trail-from-daphne-murder-probe-stretches-to-china-idUSKBN2BL1WF

 

A widening investigation into allegations of high-level corruption on the island of Malta, first levelled by murdered journalist Daphne Caruana Galizia, stretches to China and a $400 million investment into Europe by a Chinese state power company, Reuters has found.

Caruana Galizia was murdered in October 2017 as she investigated a web of companies that she believed were funneling bribes to Maltese politicians.

Now, Reuters and a consortium of journalists have traced two firms involved in that web to relatives of a senior Chinese executive for Accenture, the global consultancy firm. The executive, 43-year-old Chen Cheng from Shanghai, negotiated investments on behalf of China’s state-owned Shanghai Electric Power in Malta and in another small European state, Montenegro, over the past decade, according to Maltese officials and official records.

The revelation of a Chinese connection potentially adds a new international dimension to a scandal that has rocked Malta’s government and last year led to the resignation of the prime minister. It also could figure in a series of Maltese official investigations into the events leading up to Caruana Galizia’s death.

Backed by Malta’s government, the investments by Shanghai Electric Power were portrayed by Maltese and Chinese political leaders as one component of China’s multi-trillion dollar Belt and Road initiative to pour money into economic infrastructure in central Asia and Europe.

In 2016, a year before she was murdered in a car bombing, Caruana Galizia identified Chen’s key role in the transactions on her blog.

A total of six people in Malta have been charged with Caruana Galizia’s killing and await trial. There is no suggestion that Accenture, Chen or any Chinese company or individual is linked with that crime.

Caruana Galizia reported that Chen created a company in the British Virgin Islands in 2014, for an unknown purpose. In the same year, Chen played a central role in negotiations and due diligence for Shanghai Electric Power to invest 380 million euros ($400 million) in buying a share of Malta’s state power company, Enemalta. Caruana Galizia did not specify any wrongdoing by Chen. Chen and Accenture did not respond to Caruana Galizia’s report at the time.

Now, reporters at Reuters, the Times of Malta, the Organized Crime and Corruption Reporting Project and the Süddeutsche Zeitung, have discovered that Chen’s family set up two further companies in Hong Kong, both with business links to Malta.

Contacted for this article, Chen and Shanghai Electric Power didn’t comment. Accenture said in a statement it is taking the matter very seriously and “carefully reviewing these allegations as they relate to one of our people. We adhere to the highest ethical standards in every market in which we operate and have zero tolerance for any deviation from those standards.” Enemalta declined to answer questions about Chen.

The office of the spokesperson of China’s foreign ministry said, “China’s exchanges and cooperation with other countries are all open and transparent.”

The first of the companies set up by the Chen family, known as Macbridge, planned to pay up to $2 million to Panama firms controlled by two Maltese politicians, Reuters has previously reported. The second, called Dow’s Media Company, received one million euros ($1.2 million) from a business owned by one of Malta’s richest men, Yorgen Fenech, according to financial records seen by Reuters. Fenech is in jail, awaiting trial on a charge of masterminding Caruana Galizia’s murder. He has pleaded not guilty.

According to international legal requests seen by Reuters, Maltese law enforcement officials suspect that Macbridge and Dow’s Media were part of an elaborate scheme, involving some participants in the China-Malta deals, to make payments to politicians in Malta and siphon off profits for themselves. Reuters was unable to independently determine whether or not that suspicion is correct. Chen has not responded to Reuters’ questions on the matter.

Fenech’s lawyers declined to comment about any links between their client and Chen.

Special Report: Money trail from Daphne murder probe stretches to China |  Reuters

DAPHNE’S MYSTERY

Caruana Galizia first picked up on the money trail that would eventually lead to China in 2016 when, according to her family and records of her work seen by Reuters, she started to investigate two mystery businesses that she suspected were being used to pay bribes to politicians.

The journalist had few details of the two companies beyond their names, 17 Black Ltd and Macbridge Ltd, and a tip-off from an official source that they were part of a scheme to pay “kickbacks” – undeclared profits from government schemes – to some senior politicians. Caruana Galizia texted her son Matthew in April 2016 that she’d heard the two companies were “crucial to unravelling the web.”

The tip-off followed the discovery by Maltese officials of an email written in December 2015 by accountants for two senior figures – Konrad Mizzi, then energy minister, and Keith Schembri, chief of staff and close friend of the prime minister at the time, Joseph Muscat. That email named 17 Black and Macbridge as “target clients” that would pay an estimated $2 million into then-secret Panama companies owned by Schembri and Mizzi.

When news of the email was published in local and international media in April 2018, six months after Caruana Galizia’s murder, Schembri confirmed publicly having unrealised “draft business plans” with Macbridge and 17 Black but denied any wrongdoing. Last December, he told a public inquiry into the journalist’s death that Macbridge had been included in the December 2015 e-mail “by mistake.”

Earlier this month, Schembri was charged with money laundering, forgery and corruption in an unrelated matter. He denies the charges and is in jail awaiting preliminary court hearings. He didn’t comment for this article.

Mizzi said he had no knowledge of Macbridge or 17 Black, nor any knowledge of the email. Mizzi has not been charged in any criminal case. He reiterated in a statement to Reuters that he rejects any suggestion he had business plans with Macbridge or a personal interest in any public project. Mizzi said he knew Chen as a consultant assisting Shanghai Electric Power, “and my interactions with him were in that official context.”

7j

DAPHNE CARUANA GALIZIA:
Assassinated 16 October 2017,
the whistleblower who exposed corruption + money laundering by PM Office

 

PLEASE CLICK BELOW LINKS TO SEE THE VIDEOS

 

https://www.youtube.com/watch?v=EOTkQWzls6w

 

https://www.youtube.com/watch?v=GJw7dwdaEm8&t=33s

 

https://www.youtube.com/watch?v=F-g3ZVkC7AY&t=7s

 

Daphne Caruana Galizia was killed by a car bomb outside her home in October 2017. Photo: Mark Zammit Cordina

When Caruana Galizia was killed, she was still following the 17 Black-Macbridge tip, which she believed held the key to understanding why Mizzi and Schembri set up their Panama firms.

“Working out the truth of those two companies was really at the centre of her work. She was determined to get to the bottom of that mystery,” recalled Matthew Caruana Galizia, her son, who was first on the scene of the car bomb.

A year after the assassination, Reuters and the Times of Malta traced 17 Black Ltd to a bank in Dubai and identified its owner as Fenech, the Malta tycoon.

A year later, in Nov. 2019, Fenech was arrested at sea as he attempted to leave Malta in his luxury yacht. He was charged a few days later with masterminding the journalist’s assassination, an accusation he denies.

The mystery of Macbridge remained.

TRAIL FROM A BUSINESS CARD

When police searched Fenech’s flat, they found a business card for the Accenture consultant Chen.

As detectives questioned Fenech, the accused tycoon added another piece to the puzzle. According to records of the interview, reviewed by Reuters, Fenech told police he had information about Macbridge, which he said stood for “Malta China Bridge.” He gave no further details. It isn’t clear if he was asked about Chen or the business card.

After learning of Fenech’s disclosure, Reuters searched records in China and found a company called Macbridge International Development Company Ltd, which was registered in Hong Kong on Sept. 30, 2014.

Hong Kong’s company register doesn’t disclose who owns Macbridge. The sole director was named as a 65-year-old Chinese citizen, a woman called Tang Zhaomin.. Further records found in the Panama Papers, the trove of 11.5 million documents about offshore companies obtained by the Süddeutsche Zeitung, confirmed that Tang, via a company in the Indian Ocean island of Seychelles, was also the ultimate owner of Macbridge.

But who was Tang? The Panama Papers contained only a grainy photocopy of her passport; there was no address or telephone number.

Special Report: Money trail from Daphne murder probe stretches to China |  Reuters

AMATEUR PHOTOGRAPHER

Her name was a rare one, however, and other company databases led reporters to the Chinese city of Shanghai. There, a review of social media showed Tang was a keen amateur photographer, a former manager in a car plant and former manager with Yum China, which operates the Kentucky Fried Chicken (KFC) brand in China. In recent years, she had registered small investments in several local companies.

By tracing her posts on the social media platform Weibo, reporters made a discovery. Tang identified herself as the mother-in-law of the Accenture consultant Chen, referring to herself as “Granny” to Chen’s children. A family member later confirmed the Tang-Chen relationship to Reuters.

Tang could not be reached for comment. Questions delivered to a major outdoor advertising company where she is currently listed in corporate records as a manager and shareholder were not answered.

A subsequent trip by a Reuters reporter to the city of Nanjing, 180 miles from Shanghai, proved more useful. The purpose was to visit a catering company that public corporate records showed Tang co-owns. That company’s headquarters turned out to be a KFC franchise, located in a shopping complex and serving American fast food with a Chinese twist: fried chicken meals for around 40 yuan ($6) and gelatinous durian fruit balls.

The visit revealed a new connection with Chen, the Accenture executive, and with Malta. A staff member at another nearby KFC, run by the same catering company that Tang co-owns, said she had no knowledge of Tang Zhaomin but she did know another co-owner, a woman called Wang Rui. Wang is the boss of the catering company, the staffer said, but rarely visits the KFC outlets.

Wang Rui, records showed, is the director of a Hong Kong firm called Dow’s Media Company that was set up in 2014 within a fortnight of Macbridge. According to bank records, seen by Reuters, Yorgen Fenech’s 17 Black paid one million euros to Dow’s Media in 2016.

With a number supplied by KFC staff, Wang Rui was contacted by phone. She told Reuters she is a cousin of Tang Zhaomin and Tang is Chen’s mother-in-law. She said she set up Dow’s Media at Chen’s request and for his purposes, and knew nothing about the million euros or the firm’s activities.

“He asked me to set up the company and I thought there wasn’t any problem in doing so,” Wang said of Chen. “He told me that it would do media-type work.” She added that Chen at the time had told her he could not set the company up himself because of his connection to a state-owned enterprise. Wang didn’t name that company or otherwise elaborate.

Maltese investigators are also on the trail of Dow’s Media and Macbridge. In international legal requests, reviewed by Reuters, they have sought information about the firms’ business activities, their money flows and their ultimate owners. In one such request, via Interpol in 2018, Malta’s police asked China about Dow’s Media and the one million euros the firm received from Fenech’s 17 Black in 2016. The sum may have involved “illicit funds” linked to “possible corruption and money laundering,” Malta’s police said. There was no record of a reply from China, a Maltese official said. The office of the spokesperson of China’s foreign ministry said it was unaware of the matter.

Malta made other legal requests for information to the United Arab Emirates related to the potential payments by Macbridge to the Maltese politicians Schembri and Mizzi. These requests also cite possible corruption and money laundering. The UAE told Malta that it found no trace of Macbridge.

PAYMENTS

In June 2020, Reuters and the Times of Malta revealed that Fenech’s 17 Black took a secret $5 million profit from a Montenegro wind farm project involving Shanghai Electric and Malta’s state power firm Enemalta. Chen had promoted the project in a presentation to Enemalta’s board, according to an internal audit by Enemalta.

In 2016, 17 Black received its $5 million profit from the wind farm. Two weeks before that payday, in May of that year, Fenech’s firm made the first of three payments to Dow’s Media, according to bank records seen by Reuters and the Interpol request to China by Maltese investigators. The payments, totalling one million euros, were completed two months later.

The disclosure of Chen’s private businesses may pose a problem for him at Accenture, where he has been employed as a managing director of its energy business, the firm’s ethics handbook suggests. Accenture does not outright prohibit its employees from having private business interests, but it warns against possible conflicts of interest, including the use of Accenture information or its position “for personal gain (or that of family members or close friends).”

Asked about Chen’s links to Macbridge and Dow’s Media and his relationship via these firms with Maltese business and political figures, Accenture said it is carefully reviewing the allegations. Shanghai Electric Power didn’t respond to questions about Chen’s role. A spokesman for Enemalta said that following its internal audit of the wind farm deal “the report was passed on to the Police to assist in any investigations. Any further comments at this stage would be imprudent.”

BURGEONING INVESTIGATION

In Malta, the uncovering of the China connection could play into a series of official corruption investigations. There is a public inquiry into the events leading up to Caruana Galizia’s death, a judicial investigation into 17 Black, a judicial inquiry into the Montenegro wind farm deal, and an ongoing investigation by Malta Police’s financial crimes unit into 17 Black, Macbridge and wider corruption claims.

In Montenegro, the exposure by Reuters last year of 17 Black’s role in financing the wind farm deal has prompted a judicial inquiry. The same report also led to the expulsion of Konrad Mizzi, the former energy minister, from Malta’s Labour Party. Joseph Muscat, the former Maltese prime minister, has said he had no knowledge of any business dealings by Mizzi and Schembri.

and more BACKGROUND: Revealed – China energy negotiator in Enemalta deals is behind Macbridge

Cheng Chen helped negotiate deals with Shanghai Electric, Montenegro

The secret company Macbridge is owned by Tang Zhaomin, the mother-in-law of Chen Cheng, top,  a year-long investigation by Times of Malta and Reuters and other partners has revealed. Main photo: Darrin Zammit Lupi/ReutersThe secret company Macbridge is owned by Tang Zhaomin, the mother-in-law of Chen Cheng, top, a year-long investigation by Times of Malta and Reuters and other partners has revealed. Main photo: Darrin Zammit Lupi/Reuters

https://timesofmalta.com/articles/view/revealed-china-energy-negotiator-is-behind-macbridge.861229

• Macbridge owned by Accenture negotiator Chen Cheng’s mother-in-law
• Chen helped negotiate Montenegro, Enemalta – Shanghai Electric Power deals
• 17 Black wired €1 million to Hong Kong company fronted for Chen

A Chinese negotiator involved in multi-million euro deals by Enemalta is behind a secret company suspected of being set up to pay kickbacks to Keith Schembri and Konrad Mizzi.

Year-long investigations by Times of Malta, Reuters and other journalism partners uncovered how Macbridge International Development is owned by Tang Zhaomin, the mother-in-law of Accenture negotiator Chen Cheng.

Macbridge was named in a 2015 email as one of two companies intended to pump money in to secret offshore Panama companies which Schembri and Mizzi took ownership of that year. The other source of funds was a company owned by murder suspect Yorgen Fenech, 17 Black.

The 'Malta China bridge'The ‘Malta China bridge’

A consultant with Accenture, Chen played a key role in a €320 million deal for Chinese state-owned company Shanghai Electric Power to buy 33 per cent of Enemalta in 2014 and also pitched a Montenegro wind farm deal to the Maltese energy company, which earned Fenech millions of euro .

Chen and Shanghai Electric Power did not respond to a request for comment.

Investigations by Times of Malta, Reuters, OCCRP and Süddeutsche Zeitung also revealed the existence of another company set up in parallel to Macbridge, called Dow’s Media. It received €1 million from Fenech’s 17 Black months after the wind farm deal went through.

Chen’s link to Macbridge is another indication that Schembri and Mizzi sought financial gain from major government contracts which they oversaw as chief of staff at the Office of the Prime Minister and Energy Minister respectively.

Tang Zhaomin, who on paper, owns Macbridge.
Tang Zhaomin, who on paper, owns Macbridge.

International legal requests seen by Times of Malta indicate that local authorities suspect that Macbridge and Dow’s Media were part of an elaborate scheme, involving some participants in the China-Malta deals, to make payments to politicians in Malta and siphon off profits for themselves.

‘Malta-China bridge’

Ownership of Macbridge, whose Chinese name combines the characters for ‘Malta’ and ‘China’, was traced through the secretive jurisdiction of Seychelles to the Asian financial hub of Hong Kong.

Yorgen Fenech told investigators that ‘Macbridge’ stood for Malta – China bridge in his failed attempt to gain immunity from prosecution on charges of complicity in journalist Daphne Caruana Galizia’s murder.

Caruana Galizia first picked up on the money trail that would eventually lead to China in 2016 when, according to her family and records of her work seen by Times of Malta, she started to investigate two mystery businesses that she suspected were being used to pay bribes to politicians.

The journalist had few details of the two companies beyond their names, 17 Black Ltd and Macbridge Ltd, and a tip-off from an official source that they were part of a scheme to pay “kickbacks” to senior government officials.

Caruana Galizia texted her son Matthew in April 2016 that she had heard the two companies were “crucial to unravelling the web.” She was killed by a car bomb in October 2017 before she could fully untangle the complex network.

Panama Papers trail

Both Macbridge and 17 Black planned to pump millions into the offshore Panama structures set up by Schembri and Mizzi, according to an e-mail found in the Panama Papers cache.

The December 2015 e-mail detailing the planned money movements from Macbridge and 17 Black to Schembri and Mizzi’s Panama companies was authored by Karl Cini, a partner in the controversial auditing firm Nexia BT.

The process to open bank accounts in the Bahamas for the Panama companies was interrupted two months later, when Caruana Galizia started hinting she knew about the secret Panama companies.

Cini and other senior Nexia BT partners were detained in March on unrelated money-laundering charges together with Schembri. As of Monday, they were still in preventative custody.

When contacted by Times of Malta, Cini’s lawyer Stephen Tonna Lowell said his client would not be commenting about Macbridge.

Konrad Mizzi told Times of Malta when contacted that he had no information about Macbridge and had consistently rejected any link with his Panama company.

“I also reject the suggestion that I had business plans with Macbridge, or a personal interest in any public project.

“Furthermore, I am unaware of any person connected to the company you state to have identified. I know Chen Cheng as a consultant assisting Shanghai Electric Power in multiple initiatives, and my interactions with him were in that official context,” Mizzi said.

This e-mail by Karl Cini detailed plans for 17 Black and Macbridge to pump funds into Mizzi's and Schembri's offshore structures.This e-mail by Karl Cini detailed plans for 17 Black and Macbridge to pump funds into Mizzi’s and Schembri’s offshore structures.

Schembri did not respond to a request for comment sent via his lawyer by the time of publication.

Chen’s employer Accenture said in a statement that it was “carefully reviewing these allegations as they relate to one of our people.

“We adhere to the highest ethical standards in every market in which we operate and have zero tolerance for any deviation from those standards.”

When the Panama scandal broke in 2016, Schembri and Mizzi claimed the shell companies were set up by Nexia BT to manage their personal assets and were totally unrelated to their public functions.

Schembri has since acknowledged having “draft business plans” with 17 Black, but denies any knowledge about Macbridge.

He told the public inquiry into Caruana Galizia’s murder last December that Nexia BT had mentioned the company in the December 2015 e-mail “by mistake”.

It was initially believed that Macbridge, like 17 Black, was registered in the United Arab Emirates, though no trace of a company fitting that profile was ever found there.

Times of Malta and Reuters then followed the trail to Hong Kong following Fenech’s arrest and the Malta-China bridge claims.

A family affair

Corporate filings and financial documents reviewed by Times of Malta and its reporting partners revealed that Macbridge is owned by Chen’s mother-in-law, via a shell company in the Seychelles.

The Seychelles company was registered by Mossack Fonseca, the Panamanian law firm at the heart of the Panama Papers leak. Ownership details linking the company to Tang Zhaomin were traced within the leak by Times of Malta and its reporting partners.

Corporate filings in Hong Kong revealed the existence of another company, Dow’s Media, that was registered almost in parallel with Macbridge.

A summary of 17 Black’s transactions reviewed by Times of Malta shows Dow’s Media received €1 million from 17 Black in 2016.

Dow’s Media director is listed as Wang Rui. Corporate records show Wang is a partner of Chen’s mother-in-law in a Chinese Kentucky Fried Chicken franchise.

When questioned by reporters about her role in Dow’s Media, Wang claimed it was Chen who asked her to front the company on his behalf.

“He asked me to set up the company and I thought there wasn’t any problem in doing so,” Wang said of Chen. “He told me that it would do media-type work,” she told Reuters in Shanghai.

She added that Chen at the time had told her he could not set the company up himself because of his connection to a state-owned enterprise. Wang didn’t name that company or otherwise elaborate.

She also confirmed the family relationship between Tang and Chen.

Dow’s Media was incorporated in October 2014, just weeks after Macbridge, using the same Hong Kong-based formations agent and the same registered addresses in Hong Kong and Shanghai.

Both companies were dissolved within a week of each other in January 2019, two months after Fenech was outed by Times of Malta and Reuters as 17 Black’s owner.

Macbridge and Dow’s Media were set up in ways that make it very difficult to determine who actually owns them. They were controlled through shell companies in the Seychelles and the Marshall Islands, respectively.

Chen, Enemalta and Montenegro

The €1 million transfer to Macbridge’s sister company Dow’s Media, was sent by 17 Black in three tranches between May and July 2016.

These payments came after 17 Black secretly received a €4.6 million profit in May 2016 off the Montenegro wind farm deal that Chen helped negotiate with Enemalta.

It was Chen who had introduced an intermediary company called Cifidex, owned by Fenech’s fellow Electrogas director at the time, Turab Musayev, into the deal with Enemalta.

Cifidex bought the shares in the Montenegro project from the Spanish consortium Fersa for €2.9 million in December 2015, selling them to Enemalta two weeks later for triple the price.

Chen first pitched the deal to Enemalta’s board in December 2014 and nudged the state-owned company towards opening negotiations with Cifidex, instead of Fersa.

According to Enemalta board minutes, Chen had described Cifidex in a presentation to the board as the “sole agent” for the Montenegro project.

Enemalta’s board gave its approval for negotiations to begin with Cifidex a month later, with Kevin Chircop, who now chairs Enemalta, describing Cifidex as the actual owners of the project, according to board minutes of the January 2015 meeting.

Cifidex would only take over full ownership of the project shares in December 2015, weeks before it resold them to Enemalta.

The internal probe

An internal Enemalta audit into the deal found due diligence omissions and a lack of professional scepticism by Enemalta’s board about the Montenegro deal.

According to the report, Accenture and Shanghai Electric Power took the lead in the due diligence checks throughout the deal.

The audit, which has not been published, discovered how Accenture, represented by Chen, had contacted Nexia BT to carry out a report on the Montenegro acquisition.

Accenture’s request highlighted that a report was needed with a conclusion clearly pointing out how much the project was worth, given the market conditions provided, the internal report says.

The internal investigation was unable to get its hands on the ultimate report by Nexia BT.

Enemalta passed on the report to the police, who are investigating the deal.
A spokesperson for Enemalta declined to give details about Chen’s precise role in the Montenegro and Shanghai Electric Power deals.

Chen had used Nexia BT to set up a company in the British Virgin Islands and a Pilatus Bank account with expected cash flows of €1 million in 2015. No cash was ever paid into the account.

An investigation by the FIAU found that Nexia BT opened up an account at Pilatus Bank for Chen Cheng's company Torbridge Services.
An investigation by the FIAU found that Nexia BT opened up an account at Pilatus Bank for Chen Cheng’s company Torbridge Services.

Chen first appeared on the local scene in 2013, laying the groundwork for Chinese state-owned energy company Shanghai Electric Power to buy a 33 per cent stake in Enemalta.

The formal origins of the Shanghai Electric Power deal can likely be traced back to an agreement signed by former Prime Minister Joseph Muscat and Chinese Prime Minister Li Keqiang in September 2013.

Chinese Premier Li Keqiang meets with Prime Minister of Malta Joseph Muscat on the sidelines of the Summer Davos meeting, in Dalian of Northeast China's Liaoning province, on September 11, 2013. Photo: Xinhua.
Chinese Premier Li Keqiang meets with Prime Minister of Malta Joseph Muscat on the sidelines of the Summer Davos meeting, in Dalian of Northeast China’s Liaoning province, on September 11, 2013. Photo: Xinhua.

Chen said during a 2018 interview that the Chinese premier had personally spoken to Muscat about the project.

Muscat had met Keqiang in China, during which a “medium-term cooperation plan” was drawn up between the two parties.

A memorandum of understanding was signed a year later, detailing planned cooperation on energy, infrastructure and civil aviation projects, among others.