Allied Newspaper’s Michel Rizzo is back at work at Allied’s headquarters despite ongoing criminal proceedings, and the move may jar with guidelines of the company’s Disciplinary Code of Practice.
Allied Newspapers are publishers of The Times and The Sunday Times.
This website’s journalistic investigation was triggered by information from multiple unconnected sources that Rizzo was working out of his office at Allied headquarters in Mriehel.
The sources within Allied claimed that Rizzo is currently designated as a “consultant”. One source alleged that Rizzo was running the company from behind, but this could not be independently verified.
In response to questions, chairperson of Allied board of directors Paul Mercieca only said that Rizzo is currently a “non-executive” employee without going into any specifics. Mercieca did not answer questions on whether Rizzo is working out of his old office and whether he retains the salary he had as managing director.
Rizzo initially suspended himself from managing director last April when he was charged with various crimes – charges include fraud, money laundering, and false declarations to a public authority – in connection with grants amounting to over €1 million given to Progress Press by Malta Enterprise.
Progress Press, which is reportedly now shuttered and has its assets frozen by court order, is majority-owned by Allied Newspapers.
Responding to questions, Mercieca said that Rizzo is now employed in a “non-executive capacity and retains the full support of the board of directors” because the “court declared that Michel Rizzo has no case to answer in his personal capacity”.
He added: “The ongoing court case relates only to company dealings that took place under former managing director Adrian Hillman who faces accusations, among others, of having defrauded the Allied Group.”
According to the court decree that Mercieca latched onto above – to argue that Rizzo has no case to answer in his personal capacity – the charges span the period “between 2013 and 13 March 2019.”
Rizzo became managing director of Progress Press in 2013, and then became managing director of Allied Newspapers in 2016 after Hillman resigned upon being outed by slain journalist Daphne Caruana Galizia of having received hundreds of thousands in an offshore shell company.
Hillman has separately been charged with corruption and money laundering, as has been the managing director who preceded him, Vince Buhagair.
Among evidence presented in court by the prosecution in the Rizzo case, there is a document prepared for Malta Enterprise that was signed by Adrian Hillman and countersigned by Michel Rizzo.
Mercieca praised Rizzo for “suspend[ing] himself as managing director when charges were levelled against him.”
“In exemplary fashion,” he added, “[Rizzo] continues to apply this self-imposed sanction, as the case against the company continues, even though personal charges against him have been dropped.”
A legal source consulted by this website described Mercieca’s line of reasoning or such distinction as “an attempt to split hairs.”
The source said: “If the court finds guilt and hands down a prison sentence, it is Michel Rizzo, not the company, who will go to prison.”
The law specifies that in the event of “any offence committed by a body or other associations of persons”, such as companies, anyone who served in senior positions such as director “shall be guilty of that offence unless he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of the offence.”
Given this provision, legal sources questioned why the police have only charged Rizzo, as well as financial controller Claude Licari, but not any of the others directors.
The police said in reply to questions on this point that the “case is sub-judice and therefore we cannot comment on ongoing court procedures.”
The directors of Progress Press currently listed on website of the Malta Business Registry are Paul Mercieca, Helga Ellul, Henry Hornyold Strickland, Alex Galea and Michel Rizzo. It is not known how long these have been directors, and whether they were directors during the time-span covered by the charges.
Four of these – with the exception of Alex Galea – also serve as directors of Allied Newspapers. Michel Rizzo, whose official name is Michael, is listed as a director of both Progress Press and Allied Newspapers.
Mercieca said that Alex Galea, formerly Rizzo’s deputy, is currently the Acting CEO.
Asked in what position is Rizzo engaged now, since Galea is the “acting” CEO, and whether he confirms and denies that Rizzo is working out of his old office, as well as whether he remains on the salary of managing director – of around €80,000 according to sources and corroborating evidence – Mercieca replied: “I have nothing further to add on this subject.”
There was no response to multiple attempts to get comment from Rizzo.
Both Rizzo and Mercieca were also asked about an item in the collective agreement of Allied employees – an item in the Disciplinary Code of Practice (Guidelines). According to a copy leaked to this website, which was not independently authenticated, one of the items says that anyone “charged with committing a crime that reflects negatively on an individual’s suitability for continued employment” could be liable to suspension or dismissal from his employment.
Questions to Mercieca and Rizzo on this point – whether Rizzo’s resumption of work was compatible with this item – remained unanswered.
Legal sources also raised the point of suitability to resume work within the context of the ongoing criminal proceedings. One of the initial bail conditions was that Rizzo would not go to the company’s offices. It could not be established whether bail has been lifted or modified – a question on this point sent to Rizzo remained unanswered – yet in any case legal sources expressed unease at the idea that Rizzo was back at work in Allied’s headquarters.
In recent months, Lovin Malta has published two articles on separate investigations into Progress Press. The first revealed that Progress Press used to charge outside media houses that distributed glossy magazines with The Sunday Times for 40,000 copies at a time when actual sales were many thousands less. This occurred in the years preceding 2014.
Paul Mercieca had attacked that story as “riddled with insinuations and inaccuracies”, and maintained that the charge “was not solely a printing fee but a comprehensive charge for a combined service made up of pre-press work, printing, insertion, distribution to outlets and advertising of their publications in our media, among others.”
Sources and corroborating evidence have since insisted that the word “printing” was solely used in the description of works on some of the invoices to the outside media houses.
Another investigation reported that companies putting samples of freebie personal care products or cosmetics on magazines distributed with The Sunday Times were being asked to supply – and charged to have taped to the cover – a number of samples that were many thousands more than the actual sales of the newspaper. These companies paid thousands in charges to Progress Press, and the samples cost them many thousands more. The product placement events carried on until more recent years.