Issue link: https://maltatoday.uberflip.com/i/1122280
7 NEWS maltatoday | SUNDAY • 26 MAY 2019 MATTHEW VELLA A British fund manager whose Malta asset management firm was suspended over its im- plication in the Falcon Funds fiasco, has been extradited to Sweden to face criminal fraud charges. Anthony Farrell, 51, will face charges for his role in the €80 million fraud of a Swed- ish pension fund that was run from Malta. The pension fund held €270 million in savings by 22,000 clients, but an investigation by the Swedish pensions author- ity revealed that clients from another pension fund had been misleadingly transferred into Falcon Funds. The Swedish TV programme Kalla Fakta (Cold Facts) later crucially revealed that Farrell was facilitating a grave con- flict of interest: using his firm Temple Asset Management to invest the pension's cash into financial instruments benefit- ing another businessman, Max Serwin, alias Emil Ingmanson. Serwin has since been ar- rested in Hungary to face sev- en charges of fraud and gross negligence in Sweden, after evading London Metropolitan Police while awaiting extradi- tion. In Malta, the pension fund was taken under the control of KPMG, which discovered that at least €60 million in savers' cash were poured into obscure investments layered under one company after the other, to benefit Serwin. KPMG suspects that at Ser- win's behest, Anthony Far- rell invested heavily in assets in which Serwin himself had an interest, at inflated values. Serwin was the original pro- moter of Falcon Funds, a pension scheme marketed to Swedish savers, that invested the cash in blue-chip invest- ments. Although he was never its founder-shareholder, Ser- win had a formal role in set- ting up Falcon Funds, having attended 13 board meetings of Falcon Funds together with di- rectors Tonio Fenech, the for- mer Nationalist finance min- ister, Ian Zammit, and Joseph Xuereb. However, financial services rules require that all invest- ment decisions are vested in a firm independent of the fund's directors, which in this case was Temple Asset Manage- ment. Yet KPMG discovered that Serwin was very much in- volved in the fund's opera- tion, and that he effectively took decisions related to in- vestments, which should have been TAM's responsibility. Specifically, TAM invested the money in ETIs (exchange traded instruments), where the cash is invested in one compa- ny but 'runs down' through a chain of companies and down to the ultimate beneficiary. KPMG said the ETIs were probably designed in such a way so as to make the ini- tial investment appear liquid enough to merit the pension fund's interest, "despite the fact that ultimately the benefi- cial company at the bottom of the chain is illiquid." In fact, it was in this manner that €60 million in Falcon's cash were finally delivered to a Swedish energy firm, Werel AB. "These investments were made specifically to allow the fund to acquire shares in Wer- el, an unlisted company, which was not even eligible as an in- vestment for such a pension fund," KPMG said. "TAM did not follow the rules imposed by Falcon Funds, by investing significant amounts, indirect- ly, in Werel." KPMG also suspects the in- vestments were charged an in- flated premium for the Werel shares. "Effectively, TAM would invest some €20 million in two ETIs… for shares whose net asset value was €2.6 mil- lion. But the significant invest- ment does not reflect the value of the Werel shares, so we can- not explain this high premi- um… We cannot understand TAM's reasoning for investing such significant amounts in this company." Anthony Farrell extradited to Sweden on charges of fraud in Malta-run Falcon Funds pension scheme Swedes arrest Briton behind Malta pension bust Swedish TV4's 'Cold Facts' faces Anthony Farrell (left) and Tonio Fenech (right) with questions over investments made by the pension fund Falcon: Farrell then was responsible for the investments made in suspect companies, which could have been meant to benefit the Swedish businessman Max Serwin, aka Emil Ingmanson, a one-time Sliema resident. Farrell is now in a Swedish jail awaiting trial on fraud charges Book by 31 May 2019 for travel until 31 January 2020. Experience Asia like never before qatarairways.mt *Terms and conditions apply; please review at the time of booking. Gaze across a tranquil terraced landscape of verdant rice paddies and return home with tales of scooter rides through a patchwork of graceful landscapes. Our all-inclusive fares start from: Bali from EUR 769