Issue link: https://maltatoday.uberflip.com/i/826629
maltatoday, SUNDAY, 21 MAY 2017 18 News This story was originally published in L'Espresso and was written by Vittorioa Malagutti, Gloria Riva, Giovanni Tizian, and Stefano Vergine. MaltaToday forms part of the European Investigative Col- laborations IT was by a stroke of good luck that the Ital- ian carabinieri had stumbled on a link that could track down the treasure trove of Go- morra, the money that the Casalesi clan had piled up over years of criminal activity. In 2005 Nicola Schiavone, the son of no- torious boss 'Sandokan', dropped his wallet in a street, when the enforcement branch Carabinieri del Ros collected it, finding a business card featuring the name of Bruno Tucci. Tucci is an Italian entrepreneur with a base in Malta. Tapping his calls, the Italian police conclude that Tucci might be one of the businessmen helping the Casal di Princ- ipe clan launder its Malta stockpile, by set- ting up nightclubs, restaurants, and gaming companies – according to the investigating officials. They promptly sent a letter-rogatory to the Maltese police but the answer, which is delayed, is not exhaustive, and the Italians lose track of the money they were following. Until now, because documents L'Espresso obtained will allow now to retrace and fol- low Tucci's lead. A resident in Malta, Tucci is a shareholder in two companies on the island: MBT Services Limited, incorporated in 1996, and Genergia Ltd, incorporated in 2010. None of the two ever filed a balance sheet. This would be just one of the footnotes in the history of the Mafia, where just two hours away by catamaran lies Malta. Haru Pharma Limited is a name like so many in the Maltese companies register of almost 80,000 companies. But it's also the perfect foil to hide the past of the Calabrò family, the narco 'Ndrangheta family spe- cialising in cocaine trafficking with the South American cartels. The Calabrò fam- ily hailed from San Luca, a little village on the slopes of Aspromonte, where all Mafia bosses overseeing the European drug traf- ficking business reside. Haru Pharma is headquartered in Balzan, and although operating for four years al- ready, it has never filed a balance sheet. But its sole shareholder is Haru Pharma Hold- ing Limited, incorporated in Saint Kitts and Nevis, a Caribbean tax haven which guar- antees full secrecy. The director of Haru Pharma is Sebastiano Calabrò, said to be the heir to an important Mafia clan that groups both the Calabrò and Romeo families. After a history of cocaine trafficking, the clan was back on the anti-Mafia radar screen for al- leged money laundering. According to the Italian prosecutors, part of the proceeds of the trafficking business was used by the San Luca 'Ndrine to buy one of Milan's most traditional and old- est stores – the Caiazzo Pharmacy, which opened more than 100 years ago on Caiazzo square. And this is where 30-year-old Se- bastiano Calabrò currently works. The finding allows, for the first time, to trace a factual link between offshore com- panies and individuals with ties to the pow- erful San Luca cartel. Even in gambling, the 'Ndrangheta's ties to MALTA G-Interactive Ltd. MALTA eractiv graphic 5 MATA-TAX-EDITABLE Aigars Kesenfelds MALTA ABS Holding Ltd. Kristaps Ozols MALTA LVS Ltd. Albert Pole MALTA AJG Partners Ltd. Ilya Nikulin CYPRUS VC Vertice Ltd. MALTA G-Interactive Ltd. SHAREHOLDERS' LOANS BEFORE LIQUIDATION 1 2 SHAREHOLDERS' LOANS AFTER LIQUIDATION AND TRANSFER OF LOANS LATVIA SIA ZOA28 LATVIA SIA UG-70 owes € 2 million owes € 2 million owes € 3.5 million LUXEMBOURG 4finance S.A. Ultimate beneficial owner LATVIA / MONACO 100% owner Uldis Arnicans LATVIA SIA ZOA28 LATVIA SIA UG-70 LUXEMBOURG 4finance S.A. € 2 million loan owes € 2 million € 2 million loan owes € 2 million owes € 3.5 million € 3.5 million loan Parent firm Maltese Inland Revenue HOW COMPANIES CAN PAY THE LOWEST TAX IN THE EU TROUGH MALTA € 50,000 Final TAX Profits booked in Malta € 1,000,000 € 350,000 6/7 of the 35% TAX* € 300,000 • Shareholders not living in Malta • Company activiti not taking place in Malta The company can ask for a rebate of up to 6/7 of the 35% tax * = € 950,000 Profits after tax INCOME TAX 35% 5% INCOME TAX after rebate Ultimate beneficial owner LATVIA / MONACO 100% owner Uldis Arnicans EL MUNDO GRÁFICOS EL MUNDO GRÁFICOS MALTA G-Interactive Ltd. MALTA eractiv MALTA G-Interactive Ltd. SHAREHOLDERS' LOANS BEFORE LIQUIDATION 1 2 SHAREHOLDERS' LOANS AFTER LIQUIDATION AND TRANSFER OF LOANS LATVIA SIA ZOA28 LATVIA SIA UG-70 owes 2 owes 2 owes 3.5 LUXEMBOURG 4finance S.A. Ultimate beneficial owner LATVIA / MONACO 100% owner Uldis Arnicans LATVIA SIA ZOA28 LATVIA SIA UG-70 LUXEMBOURG 4finance S.A. Ultimate beneficial owner LATVIA / MONACO 100% owner Uldis Arnicans EL MUNDO GRÁFICOS EL MUNDO GRÁFICOS Parent firm HOW COMPANIES CAN PAY Profits booked in Malta € 1,000,000 Maltese Inland Revenue € 50,000 Final TAX € 350,000 6/7 of the 35% TAX* € 300,000 • Shareholders not living in Malta • Company activiti not taking place in Malta The company can ask for a rebate of up to 6/7 of the 35% tax (*) = € 950,000 Profits after tax INCOME TAX 35% EL MUNDO GRÁFICOS EL MUNDO GRÁFICOS Aldis Urnicans MALTA Ltd. Maris Martinsons Marcis Martinsons MALTA Ilya Nikulin CYPRUS VC Vertice Ltd. 19.5 Edgars Dupats MALTA Mercalia Partners Ltd. 7 Datos en millones 2 loan owes 2 2 loan owes 2 3.5 loan owes 3.5 THE LOWEST TAX IN THE EU TROUGH MALTA 5% INCOME TAX after rebate FROM PAGE 17 For example, Uldis Arnicans's G-Interactive (one of the FCI shareholders) was granted an €18.4 million loan that was ultimately set-off by €18.2 million worth of shares. Accounts for G-Interactive indeed declare €18.6 million in dividend income. But a tax refund claim dated 17 Oc- tober, 2014 shows no sign of the dividends, except for a much smaller sum – €1.09 million of gross dividends, which carried a 15% tax charge of €163,804 and which later enjoyed a rebate of €109,203, for a total tax of some €54,000. A Maltese accountant who wishes to remain anony- mous said this was fully legal, thanks to an agreement to avoid double taxation signed between Malta and Cyprus in 1994 and the fact that the capital gains of foreign resi- dents are not taxed in Malta. So at least €40.7 million of the cash that Oleg Boyko's Cypriot company Tirona paid to Fatcat back in 2013 for shares in 4Finance, are "exempt income" and were not taxed in Malta – something confirmed by the income tax return of FCI filed on 8 August, 2013. And then again, the Maltese companies with their Latvian beneficial owners who had received over €100 million for Boyko's acquisition, now had to funnel the money out to themselves as ultimate beneficial owners. So again, a shareholder-company like G-Interactive (owned by Uldis Arnicans) issued a €2 million loan on 18 March, 2014 to a Latvian company, SIA ZOL28, which is represented by Arnicans himself, and who, as a tax- resident of Monaco, enjoys 0% tax on foreign personal income. That same day another €2 million was loaned to Arnicans's other company, SIA UG-70, and three days later, another €3.5 million to the Luxembourg company 4Finance Holdings SA. Up until its liquidation in September 2015, G-Inter- active assigned all loans to Arnicans himself and other companies that did not need to pay them back. Loan pro- ceeds are not taxed – only interest is usually subject to taxation. Another major FCI shareholder – Aigars Kesenfelds of ABS Holdings who took over €18 million for selling his shares in 4Finance – used the money to give credit lines to other company start-ups. All these proceeds were taxed in Malta – in 2013, when ABS Holdings' profits reached €12.3 million, it paid just 4.6% in tax, €576,000. When looking at the whole picture, the presence of FCI Investments in Malta allowed the proceeds of over €100 million from Oleg Boyko to buy 4Finance without paying tax on capital gains and for the beneficiaries to pay as little tax as possible. When asked about how much tax they paid, only share- holder Edgars Dupats – who is now a partner in Boyko's Tirona Limited – answered. "The undertakings of pri- vate business companies, including those with my par- ticipation and shareholder status, are supervised and audited in line with the laws of respective jurisdiction and best industry practice. Regarding your questions on holdings in other jurisdictions, the need to establish a le- gal entity in a particular jurisdiction arises from business requirements of its shareholders. Given the fact that the particular jurisdiction of Malta operates under the Com- mon Law, such [a] legal structure allows [us] to secure fast and quality resolutions of any shareholder disputes." Malta: central vehicle Now with Boyko taking full control over 4Finance, he liquidated FCI Investments and controls the loan com- pany through Tirona Limited of Cyprus. Boyko is hidden in the company structure behind his mother Vera Boyko, the beneficial owner of 49% of shares, which is controlled by nominee shareholder Loucas Andreou. The remain- ing 51% is equally shared between Dupats amd Uldis Arnikans. Boyko then set up 4Finance Holding in Luxembourg, and opened subsidiaries in more than 17 countries, is- suing hundreds of millions in bonds on the Irish, Lux- embourgish, Stockholm and Frankfurt stock exchanges. From 4Finance SA in Luxembourg, a Maltese branch of 4Finance, without a single employee, collected over €55 million in interest between 2013 and 2015 from the 4Fi- nance subsidiaries in some 21 countries. A spreadsheet LUXEMBOURG 4finance S.A. Ultimate beneficial owner LATVIA / MONACO 100% owner Uldis Arnicans owes € 3.5 million 3.5 million loan Maltese Inland Revenue € 50,000 Final TAX € 350,000 a rebate of up to 6/7 Ultimate beneficial owner LATVIA / MONACO 100% owner Uldis Arnicans EL MUNDO GRÁFICOS MALTA G-Interactive Ltd. MALTA eractiv MALTA G-Interactive Ltd. SHAREHOLDERS' LOANS BEFORE LIQUIDATION 1 2 SHAREHOLDERS' LOANS AFTER LIQUIDATION AND TRANSFER OF LOANS LATVIA SIA ZOA28 LATVIA SIA UG-70 owes 2 owes 2 owes 3.5 LUXEMBOURG 4finance S.A. Ultimate beneficial owner LATVIA / MONACO 100% owner Uldis Arnicans LATVIA SIA ZOA28 LATVIA SIA UG-70 LUXEMBOURG 4finance S.A. Ultimate beneficial owner LATVIA / MONACO 100% owner Uldis Arnicans EL MUNDO GRÁFICOS EL MUNDO GRÁFICOS Parent firm HOW COMPANIES CAN PAY Profits booked in Malta € 1,000,000 Maltese Inland Revenue € 50,000 Final TAX € 350,000 6/7 of the 35% TAX* € 300,000 • Shareholders not living in Malta • Company activiti not taking place in Malta The company can ask for a rebate of up to 6/7 of the 35% tax (*) = € 950,000 Profits after tax INCOME TAX 35% EL MUNDO GRÁFICOS Ilya Nikulin CYPRUS Vertice Ltd. Edgars Dupats MALTA Partners Ltd. Datos en millones 2 loan owes 2 2 loan owes 2 3.5 loan owes 3.5 THE LOWEST TAX IN THE EU TROUGH MALTA INCOME 'MALTA NOSTRA' How Italy's Mafia uses Malta as a corporate base