Issue link: https://maltatoday.uberflip.com/i/739032
maltatoday, SUNDAY, 16 OCTOBER 2016 4 News MATTHEW VELLA AN inquiry by the government in- to a MaltaToday story that police did not actively pursue a money laundering investigation connect- ed to clients of a Maltese fiduciary, is likely to focus on whether law enforcement agencies were care- less about the fact that a politically exposed person (PEP) was a direc- tor of the fiduciary. But in the financial services sec- tor, questions will be raised as to what type of fiduciary role Nation- alist MP Beppe Fenech Adami was providing, when claiming he was unconnected to the operations of Baltimore Fiduciary Services. Fenech Adami was one of two co-directors when Baltimore's client, CapitalOne Investment Group, was suspected of money laundering in connection with a drug raid in the Netherlands in January 2013. Fenech Adami, who was parlia- mentary assistant for home affairs at that time, was flagged as a PEP in the police investigation, but top brass did not give guidance for fur- ther investigation, and the file was marked 'bring up – three months', and later 'put away' in December 2013. Fenech Adami, who resigned his directorship in January 2014, is adamant he was unaware of all Baltimore's operations or the po- lice investigation. "My role was that of a lawyer but I was not involved in Baltimore's day-to-day operations," he told MaltaToday this week in a tel- ephone interview. "I stayed on as director with Richard Abdilla Cas- tillo when the Hili Group, where I was a lawyer, sold its shares in Bal- timore to Abdilla Castillo in 2008." Fenech Adami insisted he was not paid a single cent for his di- rectorship, and that he was never consulted on Baltimore's man- agement of CapitalOne's affairs. "If there was a problem I was not consulted." Likewise, Abdilla Castillo – whose signature appears on all CapitalOne instructions to depos- its large sums of cash from Greek companies into a Valletta Fund Management account – last Sun- day said he was unaware of any po- lice investigation. "I was not informed by Bank of Valletta of any police investigation, and I'm not sure Abdilla Castillo was. He did not tell me anything." Fenech Adami also defended himself from statements he made in 2013 about another fiduciary company that handled the affairs of the pardoned oil trader George Farrugia. "In that case Intershore had been warned of Farrugia's il- legal actions by the lawyer of the John's Group. In this case, I knew of nothing criminal that was taking place. I would have been respon- sible had I known of something wrong, but did not take any ac- tion." Of a different opinion to Fenech Adami's 'light-touch' responsibility to fiduciary affairs, is stockbroker Paul Bonello, a man who in the past took on Bank of Valletta for its own egregious maladministration of cli- ents' monies. "Whilst I am unable to express myself on the specifics of the Fene- ch Adami case for the simple rea- son that I am not in possession of the documents involved, I can ex- plain the principles involved where the director of a company is acting in a professional capacity of a fidu- ciary company." As a fiduciary company Balti- more acted as a nominee share- holder and provided director ser- vices, which means it appears as CapitalOne's shareholder in the public records as a name-lender so that the real beneficial owner remains unknown to the world at large. "A nominee shareholder and director will in ordinary circum- stances act in accordance with the expressed wishes and in the best interest of the underlying client; however a nominee is acting legally in his own name and cannot shift any responsibility for what he himself has done, or has failed to do, on his client." That means Baltimore's directors had to exercise due diligence on the own- ers of CapitalOne, whom Dutch police suspected of having been involved in drug trafficking; as well as monitoring the trans- actions passing through. "The duties of fiduci- ary companies are now- adays ultra complex and onerous especially in the post-September 11 scenario... many years ago 'money launder- ing' referred to the core crime of drug trafficking; today it's been extended to anything consti- tuting a serious crime. Also, what may appear as legitimate tax plan- ning and legal tax avoidance in one country, can be illegal and criminal tax evasion in another. "Hence the importance of making available such fiduciary facilities to clients in a most sparing manner and only after intensive and sub- stantive due diligence at inception stage and effective monitoring and institution of controls throughout thereafter." That means, Bonello added, that directors should always be aware before approving transactions, or else they risk being used for illegiti- mate or illegal activities under the cloak of secrecy. "Not being remunerated for the said post of director does not in any way reduce the responsibility attached to the post of director," Bonello said when asked about the responsibility of a director who is not remunerated. "Nor does a claim that one is not an executive director, unless the proper controls have been put in place. Similarly, not being aware of any untoward activity on a compa- ny account of which company one is a director, is not excusable as it is a director's duty to be aware of what is taking place and to act as a gatekeeper." mvella@mediatoday.com.mt Notification to Unknown Land Owners An attempt to trace all owners was made however not all owners could be found. This notice is being made to inform owners who could not be traced. Owners are requested to contact Birkirkara Local Council by not later than Monday 14 th November, 2016 for more details. Birkirkara Local Council Email: Birkirkara.lc@gov.mt Telephone: 2144 2626 Location: Parcels of land in BIRKIRKARA indicated in colour C M Y CM MY CY CMY K Output file.pdf 1 Wednesday/October12/2016 10:5951AM Fenech Adami's defence on CapitalOne: 'I was not involved, I was not paid for my role' "I was not informed by Bank of Valletta of any police investigation, and I'm not sure Abdilla Castillo was. He did not tell me anything." Beppe Fenech Adami "Not being remunerated for director does not reduce the responsibility attached to the post... nor does a claim that one is not an executive director... it is a director's duty to act as a gatekeeper." Paul Bonello, Stockbroker Beppe Fenech Adami was not actively involved in Baltimore's fiduciary duties, but when his PEP role was flagged in a police investigation dealing with money laundering, top brass appeared unenthusiastic to pursue the investigation. As it happens, he was parliamentary assistant for home affairs at that time, but Fenech Adami says police officials did not inform him of the investigation