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Falcon Funds ‘intimate’ with Ingmanson, wanted to give trader decision-making role

The Maltese pension fund under investigation in Sweden wanted to make mysterious trader Emil Ingmanson responsible for investment decisions, a defendant has said

matthew_vella
Matthew Vella
25 January 2017, 8:00am
Emil Ingmanson (Photo: Kalla Fakta/TV4)
Emil Ingmanson (Photo: Kalla Fakta/TV4)
An investment firm tasked by Falcon Funds to invest millions of euros of Swedish pensioners’ money in blue-chip stocks, has accused the pension fund’s Maltese directors of being aware that trader Emil Amir Ingmanson wanted to take over the fund’s investment decisions.

Temple Asset Management was replying to a suit filed by Falcon Funds – whose directors include Nationalist MP Tonio Fenech – in which it rejected accusations that some €10 million of savers’ money poured into Ingmanson’s own financial instruments, were a conflict of interest.

“Ingmanson was the promoter of [Falcon], had an intimate working relationship with the plaintiff company and both of them used to work together way before they were introduced to [Temple],” the company said, painting a different picture from that alleged by Falcon.

The Maltese pension fund has sought to disassociate itself from Ingmanson, who runs Solid Venture Capital in London and has a Sliema address, calling on the courts to hold him and Temple Asset Management responsible for any losses on investments they made with Swedish pensioners’ money.

Falcon Funds ran a €267 million pension fund before it was deregistered by the Swedish Pensions Authority over allegedly fraudulent sales tactics.

It is now trying to recoup some €10 million that Temple invested in at least two of Ingmanson’s financial instruments, while the Swedish economic crimes unit in Stockholm is investigating Falcon Funds, which still owes millions in savings to Swedish pensioners. Malta’s financial regulator has placed the pension fund under the control of auditors KPMG.

Ingmanson has been alleged by the Swedish Pensions Authority of being connected to suspected fraudulent bankruptcies.

But despite no official working relationship between Ingmanson and Falcon, Temple said in its reply to the lawsuit that the actual relationship between the two parties “was intimate indeed, to the extent that the said Ingmanson would regularly attend nearly all board meetings of the plaintiff company as a guest.”

Temple said that Falcon Funds’ directors had planned to allow Ingmanson to take over investment decisions once his company Falcon Asset Management (FAM) obtains an MFSA licence.

This would have meant that Ingmanson – who acted as a key promoter of Falcon Funds in Sweden – also controversially planned to take over the pension funds’ investment decisions.

In Malta he set up FAM, under ultimate ownership of an Isle of Man company. One of the directors of FAM included former Bank of Valletta chief executive Tonio Depasquale.

Temple alleged that FAM was always intended to take over and itself carry out the relevant investment management activities for Falcon Funds “as soon as possible”. But the MFSA licence was never issued after the Swedish press reported that Falcon Funds had obtained clients’ accounts fraudulently, leading to an investigation by the Swedish Pensions Authority.

Temple said Falcon’s directors were already aware that Ingmanson could have used money invested in one of his instruments (Solid Venture ETI) to advance a high-interest loan to Swedish payday loan company Trustbuddy, right before its bankruptcy. “The Falcon Funds board even had a conference call concerning the said articles during Christmas time in 2015,” it said.

“Anthony Fenech, Joseph Xuereb and Ian Zammit were constantly in communication with Ingmanson through emails sent to [his] address… all these emails are related to the period preceding the articles which appeared in the Swedish media and therefore clearly show that the directors were well aware of defendant Emil Ingmanson’s connections with those investments,” Temple said.

Temple defended its decision to invest money from the pension fund in Ingmanson’s Solid Venture ETI and Boardwalk Real Estate ETI. “It is misleading to state that this was a means of financing Solid Venture when in effect this was an investment in a company, like other investments… in no way can it be stated that the investment in question was not a legitimate one, was not done after the exercise of due diligence or was not in the interest of the investors in the relevant subfunds.”

Indeed, Temple said that emails show Solid Venture’s chief executive Andreas Gregoriou “appears to determine the redemption offer… was ultimately approved by the SICAV board which agreed with it,” suggesting that Falcon were aware of the investment. 

“It is truly outrageous for the applicants to falsely assert they knew nothing... in actual fact everything in their full knowledge, to the point that communications were effected through an email account of the said Solid Venture Capital. If someone wanted to hide his connection with an entity, it is unfathomable that he would use the email account provided to him by such entity to communicate with those persons to whom he purportedly was seeking to conceal his links with that same entity.”

Swedes welcome MFSA decision

The Swedish pensions regulator has welcomed a move by the Malta Financial Services Authority to place Falcon Funds under the control of auditors KPMG.

As a SICAV, Falcon Funds is ultimately owned by the savers themselves, but the fund is run by its directors. However, all investment decisions are delegated to another firm – in this case Temple Asset Management – to manage the cash by investing it in high-performing or risky investments that can improve the value of the savings.

The SPA was concerned that investments made by Falcon Funds in “illiquid” instruments meant it would not recoup the value of the savings, so it demanded the return of some €267 million in some 22,000 pensioners’ savings.

A court case that Falcon Funds opened against the SPA in Stockholm, challenging the deregistration as invalid and a breach of contract, has now been withdrawn.

The SPA said that Falcon Funds’ lawsuit against Emil Ingmanson confirms its original accusations in its own investigation.

“This confirms beyond doubt that our suspicions were correct. As far as we understand it, this is now also the official position of Falcon Funds’ board of directors, only that they claim to have been misled by their investment manager.”

But the SPA says the matter back in Sweden is far from resolved.

“We are still in a very serious situation, and it has been made worse due to the fact that Falcon Funds has been left without management for several months. Therefore, we are pleased that Falcon Funds now will be subject to proper management and that we now finally can expect an orderly redemption of the remaining assets,” a spokesperson for the SPA said.

“Up until now, Falcon Funds, under the supervision of the Board of Directors, has inflicted serious damage on both the Swedish pension savers and the Swedish pension system. Our work on this matter will therefore continue with full force, with the objective to get as much money back as possible. We will also hold those responsible for this accountable and we will consider all available legal options.”

The Swedish economic crimes unit has yet to receive a reply from the Office of the Attorney General in Malta, this newspaper is informed.

The SPA says that it is aware that the Stockholm investigators have “assembled a large team of prosecutors, police officers and analysts and expect a rather lengthy investigation.”

matthew_vella
Matthew Vella is executive editor at MaltaToday.
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