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Thanet District Council expressed concern about Italian investors' mafia links when it was trying to rescue debt-ridden ferry company Transeuropa

11 March 2014
by Chris Price

Council chiefs expressed concerns that potential investors in a troubled ferry company it was trying to keep solvent had mafia links and might use it to launder money, it has emerged.

Thanet council raised the issue in 2012 when Transeuropa was trying to find new backers for the company to prevent it folding.

The ferry operator went into administration in April last year leaving Thanet council with unpaid port fees of £3.4m. The debts were run up in a secret deal with the council.

A TransEuropa ferry berthed in the Port of Ramsgate

A TransEuropa ferry berthed in the Port of Ramsgate

Now documents released to the KM Group under Freedom of Information laws indicate council officials raised the question of the mafia’s involvement in talks about a rescue package.

It is not clear what triggered the concern about the unidentified Italian investment partners Transeuropa was trying to get on board.

However, an e-mail in the newly-published dossier of files show that Mark Seed, the council’s commercial services manager, wrote to council chief executive Sue McGonical about mafia links.

“I did ask about the mafia issue but Michael [Diaz] indicated his mother had asked the same question and he is certain that the type of companies they are dealing with are not mafia fronts..." - Thanet Council's Mark Seed

The confidential message followed a meeting between the council and Transeuropa representatives in June 2012.

Under a section headed ‘Italian Deal,’ Mr Seed wrote: “I did ask about the mafia issue but Michael [Diaz] indicated his mother had asked the same question and he is certain that the type of companies they are dealing with are not mafia fronts. I have nothing on this otherwise but the fingers of investment and money laundering from organised crime can spread far and wide.”

Michael Diaz was a director of Transeuropa and was representing the company as the two sides sought to broker an agreement to keep it afloat.

The e-mail also alluded to complex negotiations with potential partners from Italy, with Mr Seed saying: “There is an obvious profound culture difference and TEF (Transeuropa) have learnt to their cost that trying to force the deal on just makes everything go slower. There are also a number of egos involved across the various companies that need smoothing over as everyone knows best.”

The mafia concerns expressed by council officials were eventually overtaken by events, as the company was unable to put a deal together and folded.

It was then that the secret deal Thanet struck to defer berthing fees was revealed.

The dossier of files show the council was involved in intense negotiations with Transeuropa to recover its debts in the two years after it signed the deal.

Transeuropa Ferries, which went into administration in May

Transeuropa Ferries, which went into administration in May

However, several months earlier in November 2010, the council was warned that any deal it struck would hurt it more than the company.

A lengthy memo from the port’s maritime services accountant to senior officers as early as 2010 warned: “Transeuropa are also well versed in pushing all the buttons. What this means is they will chop and chnange who they want to talk to in TDC according to who is most likely to give them the most.”

It went on: “If Transeuropa are pushing for something in relation to port charges, they will have worked it out in detail and it will reduce their costs pound for pound as it cuts our income.”

Thanet council pressed ahead with the deal - only for it to unravel as the ferry operator failed to get new investment and was unable to repay its debts under the agreement with the council.

Although Thanet threatened to go to court to get its money back, it eventually threw in the towel after being advised that it had little chance of recouping the £3.4m.

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