Digital games firm ‘lured people on false promises’

Former employees of a video gaming company at the centre of a political controversy have accused their ex-employers of luring workers to Malta on false promises of success. 

“TRC lured people into coming to Malta based on promises that it was very well-funded, that they were going to expand rapidly and dramatically with a secondary studio in Malta that never materialized, and that the company had important contacts with major companies to publish the product, when it turns out that they were just showing it around like anyone else would do,” a senior manager told MaltaToday.

Prime Minister Joseph Muscat last month accused the previous administration of having invested €8 million in TRC Entertainment, despite a due diligence exercise having warned of its founder’s “dubious background and links to criminal activity” – claims made by Muscat in the House of Representative.

Former finance minister Tonio Fenech retorted that the company was vouched for by established names in the video game world, and that Malta Enterprise’s investment was in either way conditional on TRC reaching profitability.  

However, behind the political tit-for-tat lie people who were fooled into believing that they were joining something special, with some even quitting their jobs and selling their houses to come to Malta. 

Indeed, the senior manager who has spoken to MaltaToday has chosen to remain anonymous as he plans to spearhead two separate lawsuits – one against TRC itself for charges including misrepresentation, and another against the Department of Industrial Relations (DIER) over its alleged failure to investigate a month’s worth of outstanding salaries. 

TRC Entertainment’s founders, Peter Robinson and his son Craig set up in Malta in 2011 with a dream to produce the next best-selling children’s video game ‘Wishingtooth’ – the tale of a tooth fairy’s adventures, that was the brainchild of Craig’s novelist girlfriend Ashley Mansour.

They wooed Malta Enterprise (ME) by recruiting some of the crème de la crème in the industry to their executive board – including former Jetix Europe CEO Paul Taylor and former Sony Computer Entertainment Europe president Chris Deering – the latter was also to become Malta’s special envoy for digital gaming. 

Viewing it as a perfect opportunity for Malta to branch out into a new digital gaming economic niche, ME agreed to spend €4 million to become a minority shareholder in the venture, as well as an additional €4 million on investment – tied to a contract that half of TRC’s workforce would be Maltese and that the company would become profitable by the end of the year. 

However, the dream soon turned sour and TRC was struck by poor plot reviews and continuous inner conflict – with the executive forced to shake up its management three times in four years. 

With no revenue from the game itself, TRC was forced to lean on a continuous stream of fresh private investment, hyping its future product up to keep itself afloat. Investment was channelled through Euphoria Media, an Ireland-based capital investment firm. 

MaltaToday is informed that some employees were placed in precarious conditions, with some not earning enough to afford rent and one in particular not receiving a single salary for several months and only surviving through couchsurfing. 

Moreover, the Maltese “quota” only ever reached some 40%, and the senior source explained that TRC viewed the local workers as “cheap labour” – willing to work long hours under poor conditions for the sake of forming part of what they believed to be a grand project. 

The final straw came when Euphoria’s chairperson, Simon Smith, also a TRC director, decided to put all his eggs in one basket and chase down a single €3 million investment. 

While he was keen from the get-go, he eventually lost interest – reportedly after his wife was diagnosed with cancer. Although he was contractually bound to purchase TRC shares, he was not obliged to pay up until months later. With TRC revenue so heavily reliant on constant investment, the news came as a deathblow to the company – which could no longer afford workers’ salaries and operating costs. 

Smith’s pledge to cover salaries and expenses pending new investment never materialized, Euphoria eventually got struck off as a company, and TRC finally shut down in October 2014.

“As salaries dried up, we were assured that we would be paid again, and so people stayed, exhausted their financial reserves and found themselves in trouble to the point that some got evicted and didn’t have enough money to fly back home,” the senior manager said.

Malta Enterprise spokesperson Fleurette Zarb Cocks told MaltaToday that ME remains committed to ensuring that all former TRC employees are paid the arrears of their salaries. 

Its stance with regard to recovering the €8 million investment remains the same as it was when TRC closed its doors in September 2014. 

“We are taking advice on the options open to us, in view of the commitments made with TRC by the previous administration,” she said. “ME will seek to ensure that TRC enforces and collects guarantees available.”