Issue link: https://maltatoday.uberflip.com/i/678126
6 maltatoday, WEDNESDAY, 11 MAY 2016 News PANAMA PAPERS IN the end, Nexia BT – the much- maligned, mid-tier audit firm that facilitated the controver- sial offshore set-ups for Konrad Mizzi and Keith Schembri – bro- kered similar deals for 17 clients. At least that's what the Panama Papers, a leak of 11.5 million files from one of Panama's main legal firms Mossack Fonseca, tell us so far. The bulk of the administrative work to create offshore compa- nies from Malta seems to have gone to Bald Eagle SA, the firm run by Michael Alfred Del Vec- chio, once a decorated officer and missile defence system ex- pert, now a middleman special- ising in referring rich people to Mossack Fonseca, in Panama. Indeed, he was the man who first helped Keith Schembri – be- fore he became the Prime Min- ister's chief of staff – set up his British Virgin Islands company, together with another director in Schembri's business group. Other people he helped included Adrian Hillman, also outed as the owner of a BVI company. Be- cause Schembri's, Malcolm Scer- ri's, and Hillman's BVI compa- nies were created within months of each other in 2011, and be- cause Schembri's Kasco group supplied newsprint to Allied Newspapers, of which Hillman became its managing director, the stage was set for allegations that bribes had passed on from Schembri to Hillman. Those allegations were made by Daphne Caruana Galizia, the Malta Independent columnist whose son Matthew was one of the data journalists who worked with the International Consor- tium of Investigative Journalists: a month before the formidable Panama Papers leak, she outed energy minister Konrad Mizzi and Keith Schembri as the own- ers of two Panama offshore com- panies and New Zealand trusts, as well as Schembri's and Hill- man's alleged 'BVI connection'. Hillman's employers, Allied Newspapers, set up a board of in- ternal inquiry instead of report- ing the bribery allegations to the police. Del Vecchio shows up in the Mossack Fonseca leak as keeping an office in Malta. That office is City Advisory, a company that is actually registered in the Brit- ish Virgin Islands, as one of its shareholders and possibly benefi- ciaries, Antonio Depasquale told MaltaToday. Depasquale, a lawyer who once held the position of president of the PN's youth organ MZPN (Moviment Zghazagh Partit Nazzjonalista) told MaltaToday that he had known Del Vecchio for years, and that it was his idea to promote Malta as a jurisdic- tion for foreign shareholders to open subsidiaries here. But they registered City Advi- sory in the British Virgin Islands in 2012. On his part, Depasquale runs the City Legal office in Val- letta. He has confirmed that he is a shareholder and when asked, did not deny being a beneficiary of the BVI firm. "When we came to incorporate the company, we saw that the op- portunity for profit was low and we felt we didn't need to incor- porate it in Malta. It was [Del Vecchio's] wish. Malta offers the same services as the BVI but he would have had to pay more in administration fees." Depasquale did not deny that the BVI company allowed City Advisory to pay less taxes on their profits. Del Vecchio had warned Mos- sack Fonseca that Nexia BT was poaching his clients, in an email revealed by the Australian Fi- nancial Review, but in the end Keith Schembri used his busi- ness group's auditors in 2015 to open a new offshore company in Panama for his Haast Trust. Likewise, Konrad Mizzi. Nexia BT spent months searching for an international bank that would accept the two PEPs. In the end they were to settle for a Panama- nian bank that demanded at least $800,000 in annual deposits for Schembri's and Mizzi's alleged business activities: the previous for remote gaming and waste recycling business, the latter for brokerage fees. Despite the na- tional outrage, they are still chief of staff and minister without portfolio respectively at the Of- fice of the Prime Minister. While Bald Eagle SA, which is Del Vecchio's alone, is 'linked' to Malta in the ICIJ database with 189 entities it registered in tax havens through Mossack Fonse- ca, in Malta it is EMD Advisory Services that made most use of the Panama firm with 72-regis- tered companies. EMD's claim to fame in all this would be the fact that former EU ambassador and Nationalist government's enforcer, Richard Cachia Caruana, is a consult- ant at the firm, where his sister Louise Ellul Cachia Caruana is a senior partner. The firm said he holds no shares or directorships. Of course, it sought to clarify where it positions itself in the constellation of facilitators for offshore tax 'planners'. "Togeth- er with other reputable firms and companies in Malta, EMD provides corporate services in the financial services sector. It is firms like this that over the past 16 years have helped Malta become the successful financial services centre that it is today." EMD said it never assisted any politically exposed persons from any jurisdiction, including Mal- ta, to set up any entity in the BVI, Panama or similar jurisdiction. Cachia Caruana's name fea- tured prominently with Labour spin doctors eager to include his name as part of the army of intermediaries who make off- shore possible. He declared that he held "no shares in companies in Panama, the British Virgin Is- lands or any other tax haven and has never held any." Cachia Caruana also said that he had provided no advice about the opening or otherwise of companies in Panama, the Brit- ish Virgin Islands or any other tax haven at any stage of his pro- fessional career. "I have no conf licts of interest between my personal holdings and any State interests and have never had any. My relationship with EMD is solely to provide this firm and its clients with ad- vice on EU-related matters and I have never had any shareholding or other financial interest in the firm nor have I ever held any di- rectorships or management posi- tions with the firm. "The current attempts by mem- bers of the Prime Minister's staff to imply any connection between me and the Panama Papers are totally deceitful." Nationalist MP Francis Zam- mit Dimech, also rushed to dis- associate himself from the fact that FZD Trustees, now renamed Valletta Trustees, is mentioned in the Panama Papers. Valletta Trustees is run by lawyer Reu- ben Balzan, president of the Chamber of Advocates. Zammit Dimech said that after the 2013 elections, his legal office set up the BVI company International Goods and Services Limited. Zammit Dimech resigned from the trust services company in August 2014. "You cannot conf late the case of Mizzi and Schembri and their search for an international bank account, with the role of any law- yer and accountant who offers these services," he said in a state- ment in reaction to reports in the Labour press of his 'Panama con- nection'. "Put simply, we're like lawyers defending the accused in a criminal case. We're not the ones facing the criminal charge!" The intermediaries: the people who make offshore possible 'We're not the ones facing the criminal charge': MP who set up company with BVI connection, describes roles of lawyers and accountants who work in offshore. Top providers with clients in Malta Bald Eagle Services SA (BV) 189 EMD Advisory Services 72 Prospera Europe 67 Hamels Malta 45 Chetcuti Cauchi 36 Intertax Services 27 BDO Malta 26 Unifin Consulting Limited 21 Alexander Kuryshev 20 Stephen Balzan 17 Nexia BT 14 Neville Curmi 13 CAC Fiduciary 10 Albert Muscat 10 Portman Consultants International 8 Karm Borg 8 Henley & Partners 5 New Market Resources 5 Capricon International 4 Norman Darmanin Demajo 4