Issue link: https://maltatoday.uberflip.com/i/814533
maltatoday, SUNDAY, 23 APRIL 2017 12 News MATTHEW VELLA THE company tasked by the ill- fated Falcon Funds pension fund to handle its investments, has been fined a total of €612,000 by the Malta Financial Services Author- ity over breaches of 23 different standard licence conditions and its licence suspended. Temple Asset Management, run by John Farrell, was the investment manager for the large pension fund run by Falcon Funds, a Maltese SICAV whose directors included Nationalist MP Tonio Fenech – the former finance minister. Falcon Funds offered three sub- funds on the Swedish pension sys- tem, before it was accused of de- frauding 22,000 pension investors by the Swedish pensions authority. It has now been delisted from the pension system and placed under the control of auditors KPMG. But it is also being investigated by the Swedish Economic Crimes Authority over allegations that the fund was unable to pay back a total of €247 million (2.4 billion Swedish kroner) in savings to its investors. Falcon Funds' directors have also sued Temple for damages, claim- ing they invested over €10 million of savers' cash in what turned out to be an 'advance' to the mysteri- ous trader Emil Ingmanson, acting in bad faith and of hiding a serious conflict of interest. In its investigation report, the MFSA said that while it had ex- pected Temple to "demonstrate a culture that supports effective compliance – clearly this was lacking as evidenced by the broad range of breaches that were re- corded, touching practically all FALCON Funds directors – Tonio Fenech, Joseph Xuereb and Ian Zam- mit – have taken up a battle in court, accusing Temple Asset Management of having invested over €10 million of savers' cash in what turned out to be an 'advance' to the Swedish trader Emil Ingmanson and his London company. The accusation appears to con- firm the very same allegations of the Swedish Pensions Authority (SPA) when it kicked Falcon Funds out of its private pension platform – but at the time, Tonio Fenech chose to de- fend Ingmanson, saying he was the subject of an unfair press in Sweden. An investigation carried out by the Swedish TV programme Kalla Fakta (Cold Facts) in 2016 had crucially revealed an important email that showed that Temple Asset Manage- ment were setting up Ingmanson to take over Falcon Funds' investment decisions with his own company, Falcon Asset Management. The upshot was a grave conflict of interest at play: money deposited by Swedish pensioners with Falcon Funds was being invested by its in- vestment manager, Temple, into financial instruments owned by In- gmanson, while knowing he planned to replace it as investment manager with his Maltese company Falcon Asset Management. "The claims made of the links with Ingmanson are at the least specula- tive," Fenech first said in June 2016. He described him as a "person of re- pute", even declaring that he had "no involvement in the selling or invest- ments decisions of the fund." But now Falcon have accused Tem- ple of investing some €10 million in financial instruments to directly ben- efit Ingmanson's business – although when the SPA pointed out this con- flict, Fenech was adamant that there was nothing to back up these allega- tions. Falcon claims they were unaware that money from its €276 million pension fund was used to invest in Ingmanson's Solid Venture P2P. "In- gmanson procured the Solid Venture P2P investment to use for his Solid Venture [company], which interest was not declared to Falcon." It is possible that Solid Venture could have used €3 million of this cash in an emergency loan to the beleaguered payday loan company Trustbuddy, in the summer of 2015. Ingmanson's 'kickback' was supposed to have been a 10% interest. Trust- buddy went bankrupt soon after. Falcon's directors said that when Temple demanded the cash back on the Solid Venture investment, Ingmanson came back saying the redemption would come at a loss of €2.7 million. "Temple was well aware, or should Your consumer rights are our priority. We have confirmed co-operation from national agencies to ensure the safeguarding and enhancements of all your privileges as a consumer. YOU ASKED US FOR ENFORCED CONSUMER PROTECTION LAWS WE DELIVERED Putting you at the heart of Europe POST CREDIT CARD Investment firm in Falcon imbroglio fined €612,000 and suspended How the Maltese pension fund and its investment manager ended up in a court feud Falcon