Kevin Deguara, along with his associate Jean-Carl Farrugia, was charged in court with money laundering in connection with the Vitals and Steward Health Care case and is suspected of having served as one of the money-laundering fronts for Keith Schembri. His involvement in what was previously the SmartCity project, Shoreline Mall, has been particularly interesting due to the manner in which he acquired roughly a third of the project’s shares at an extraordinarily discounted rate.
What is even more striking is that Kevin Deguara acquired what was effectively a distressed asset and then proceeded to finance it through the public market, while regulators appeared entirely unfazed by the financial toxicity surrounding the project, which was evident from its very early stages. The end result today is that Shoreline can’t guarantee to pay back its bondholders turning its publicly available bonds as the second distressed real-estate project on the public market to become distressed after the MIDI fiasco.
The financial history of Shoreline Mall reveals that the project spent years surviving on shareholder support, related-party financing and eventually public bond funding long before it generated meaningful revenue.
The earliest public face of the Shoreline project was businessman Stephen Carter, who fronted the development around 2017 and 2018 through companies originally linked to Ricasoli Properties and later Shoreline Residence Ltd. Carter heavily promoted the project before the relevant planning framework had even been fully regularised.
One of the key holding companies behind the project — later renamed Shoreline Holdings — had no assets before South African businessman, Ryan Otto entered the structure in 2016. On 23 August 2016, Otto injected more than €1.1 million into the company in exchange for a 50% stake.
At the same time, Kevin Deguara and Jean Carl Farrugia contributed only around €300 while still obtaining a combined 10% stake through the issuance of bonus or free shares. Stephen Carter received 34% while Roderick Psaila received 6%.
At precisely this stage, Deguara and Farrugia consolidated their influence through Middletown Investments Ltd, jointly owned through their corporate vehicles Zircon Capital and Cornhill Capital.
Public filings show that Middletown gradually increased its stake in Shoreline Holdings between 2018 and 2020 through multiple recapitalisations and share acquisitions.
In May 2018, Middletown assigned a €320,000 receivable to Shoreline Holdings in exchange for shares. Later that same year, the company acquired a further 1.75 million shares for €1.25 million before later increasing its ownership stake above 36%.
The decisive turning point came when Stephen Carter became embroiled in money-laundering proceedings and FIAU-related freezing orders in 2018. Carter subsequently resigned from the companies connected to the Shoreline development and transferred his shares to the remaining investors.
This effectively left the project under the operational control of Ryan Otto and the financial and legal structuring influence of Kevin Deguara and Jean Carl Farrugia.
The project itself remained financially distressed for years afterwards.
Shoreline Mall PLC was formally incorporated in December 2017 to develop the retail and residential components of the SmartCity project. Yet the company spent years without generating operational revenue while accumulating liabilities and depending almost entirely on external financing.
Its earliest financial statements show that by 2019 the company had still not commenced trading and registered a loss while carrying liabilities of almost €800,000, much of it owed to related parties. Directors openly acknowledged that the project’s operations and construction costs were being financed by the parent company and related parties because the development remained in its construction phase.
By 2020, Shoreline Mall plc had acquired sub-leased rights over part of the SmartCity land through temporary emphyteusis arrangements involving related company Shoreline Residence Limited, with the land rights and associated right-of-use assets valued at more than €13 million. The underlying concession ultimately originated from the SmartCity Malta land agreement granted by the Maltese government. In 2019, SmartCity Malta transferred part of the concession area to Shoreline Residence Limited through a sub-emphyteusis agreement tied to financial obligations amounting to as much as €32 million in premiums and related payments over the course of the project.
Effectively, this government-backed deal was even worse than the one that the government signed with MIDI because Shoreline shareholders are going to keep the land once the project is completed, all the while they finance the project via the public markets.
Following these agreements, total assets for shoreline Mall PLC surged on paper above €20 million, but the company was still loss-making and had not yet begun generating commercial revenue. Construction costs continued to mount and liquidity pressures intensified. The company’s 2023 financial statements openly acknowledged delays affecting the opening of the commercial centre. Shoreline Mall still registered a loss of more than €400,000 while liabilities and amounts owed to group companies continued increasing sharply. Directors admitted that short-term cashflow requirements continued to be financed by related companies and funds raised through bonds.
In comes the public market to bail-out this total fiasco. To sustain construction and liquidity, Shoreline Mall turned directly to the Maltese public market via credit.
The bonds were fully subscribed and became a critical funding mechanism for completion of the project.
In practice, the public effectively financed a large part of the development through the Maltese bond market while the project remained years away from operational profitability.
Only in 2024 did Shoreline Mall finally begin generating meaningful rental income after opening to the public. The company registered its first substantial profit of around €1.5 million as tenants began operating commercially.
However, the company’s latest financial statements show that financing pressures still remain. Despite stronger rental income, Shoreline Mall returned to losses in 2025 after finance costs and depreciation. More importantly, the company acknowledged looming refinancing risks linked to the maturity of its 2026 bonds and the management disclosed that it was actively exploring negotiating refinancing arrangements with financial institutions.
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