Issue link: https://maltatoday.uberflip.com/i/826731
maltatoday, MONDAY, 22 MAY 2017 MATTHEW AGIUS THE first step to address the is- sues raised by the publication of the Malta Files and save Malta's financial services sector is to address the conflicts of interest of the regulator's top brass, say Alternattiva Democratika. Keith Schembri and Konrad Mizzi's legacy will be the incal- culable harm they have caused the country's reputation, Al- ternattiva Demokratika Chair- person Arnold Cassola said at a press conference outside the MFSA offices yesterday morn- ing. "But we must also be careful not to allow foreign nations to exploit this weakness that emerged in the Panama Pa- pers and say things that are not true. For example, that Malta is an offshore centre. This is not true at all, Malta is not an offshore centre. Companies registered in Malta are pub- licly recorded and information of how they are composed are publicly available." The Malta Files news story, was in fact, based on publicly-available in- formation, he noted. It was important to combat half-truths and untruths in media reports, Cassola said, qualifying that statement by highlighting the importance of addressing shortcomings in the system. He pointed to Pilatus bank, asking how the regulator "gave a licence in 12 weeks to a person who had no experience in banking." "We ask, was due diligence carried out properly? Was this bank given preference to speed things up or, as I am told by people working at MFSA, that the structures and resources have remained the same for the past 12 years." He pointed out that AD was the only party to ask the Na- tional Audit Office to investi- gate this matter. Professor Joseph Bannister, whilst chairperson of the MF- SA was also deputy chairper- son of Finance Malta, whose job was to attract foreign in- vestment in Malta, Cassola said. "So you have the Vice Presi- dent advertising and bringing these people to Malta and then the same vice president who is also the regulator carrying out due diligence on the people he has attracted to Malta." This has caused enormous harm to Malta's standing in the Euro- pean Parliament, he said. "Amongst MEPs it is unbe- lievable... cannot be under- stood how the chair of the MFSA is also vice president of Finance Malta. He must be re- moved immediately." AD Secretary General Ralph Cassar expanded on the prob- lem facing the financial servic- es sector in Malta. The facility of having nominee companies was being abused, he said. "It is clear that in certain cases, these letterbox companies are covers for illegal operations. They are doing a lot of harm." He called for the creation of an independent board of inquiry into the involvement of such companies in organized crime and money laundering. "Nom- inee companies are magnets for shady business and organ- ised crime." Cassar also argued against the regulator's ties to government. The MFSA is riddled with con- flicts of interests, he said. The company tax rebate sys- tem was not sustainable in its current form, he said. Coun- tries have a right to establish their own tax rates, but as a matter of principle, tax should be paid in the country where profits are made. "We cannot expect other countries to keep their mouths shut when their tax base is being eroded. We aren't talking about charity here. We need to smell the cof- fee before it's too late." Fiduciary companies "are a cover up for potential criminal activity," AD's Vice Chairman Carmel Cacopardo suggested, arguing in favour of a public list of ultimate beneficial own- ers. "The secretive element should be removed," he said. Cassola said Italian publica- tion Espresso has run an 8-page spread of persons connected to the mafia who have invested in Maltese companies. "Foreign countries are aiming at the fi- duciary company aspect to hit the rebate," he warned. News Conflicts of interest of financial services regulators need addressing, AD insists www.maltatoday.com.mt FROM MONDAY TO FRIDAY Fiduciary companies "are a cover up for potential criminal activity," AD's Vice Chairman Carmel Cacopardo (third from left) suggested, arguing in favour of a public list of ultimate beneficial owners. "The secretive element should be removed."