Secret Panama company that Frank Sammut used to hide Enemalta conflict of interests

Enemalta consultant Frank Sammut travelled to Lugano to set up Moloch Trading and hide interest of chairman Tancred Tabone and businessmen Frank Portelli and Anthony Cassar in oil business

Frank Sammut: the petrochemist used a Panamian company with equal shares of all four men accused of bribery in the Enemalta oil scandal.
Frank Sammut: the petrochemist used a Panamian company with equal shares of all four men accused of bribery in the Enemalta oil scandal.

A glaring conflict of interest between Enemalta officials and their private sector partners was hidden from prying eyes thanks a trust agreement that Frank Sammut, the petrochemist, signed on their behalf.

A trust agreement signed by Sammut and seen by MaltaToday confirms that when Sammut was chief executive of Enemalta subsidiary MOBC, he roped in then Enemalta chairman Tancred Tabone and partners Francis Portelli and Anthony Cassar with a 25% share each in a nominee company that sealed their business partnership.

But the timing of the company incorporation, together with the fact that the nominee company was established in secretive Lugano and registered in Panama, suggests that the Enemalta officials wanted to keep their business relationship secret due to the glaring conflict of interest they had. Sammut is facing criminal charges of accepting bribes during his tenure as MOBC chief executive.

The ‘secret’ company whose purpose was to hide the interests of senior Enemalta officials who were also heading national oil bunkering company MOBC, was formed as early as June 2003, at a time when the Tabone and Sammut were suspecting to be hindering the liberalisation of the sector.

Former Enemalta chairman Tancred Tabone and businessmen Francis Portelli and Anthony Cassar formed the company Moloch Trading Corporation on 6 June, 2003, along with Frank Sammut, a former chairman of the Enemalta subsidiary MOBC and later advisor to the Enemalta chairman.

‘Moloch’ is the name of an ancient Ammonite deity that features in the Bible as a god of apostate Israelites. The company was formed in a trust agreement that Sammut signed with the Veco Trust of Lugano, Switzerland to instruct it to take on the management of Moloch Trading, so as to hide the company’s real beneficiaries.

The company, registered in Pana- ma, was set up with a trading capital of $10,000, and confirms the extent to which political appointees like Tabone and Sammut had colluded to hide their private interest in the state-owned Mediterranean Oil Bunkering Corporation (MOBC).

At least another three similar companies registered in the USA, Panama and Hong Kong exist with trust agreements signed by Frank Sammut that list the four beneficial owners with equal 25% shares.

Enemalta oil scandal

Tabone, Sammut, Portelli and Cassar are facing criminal action on various charges of money launder- ing, trading in influence, and corruption in an investigation triggered by MaltaToday’s revelations that Frank Sammut received kickbacks from commodities firm Trafigura for the sale of oil to Enemalta.

The clamorous revelation led to a presidential pardon for oil trader George Farrugia, the representative of Trafigura and Totsa, who told the courts of further bribes paid regularly to Enemalta officials like Sammut and Tabone, and two Enemalta officials, for the provision of oil consignments to the state utility.

It is now known that Tabone and Sammut, while in their official Enemalta roles, were silent partners in the private oil bunkering firm Island Bunker Oils Ltd (IBOL) as early as 2003, together with Portelli and Cassar.

It was at this time, as former Privatisation Unit head Manuel Ellul had told the court, that the privatisation of MOBC – Enemalta’s oil bunkering arm – started to encounter stumbling blocks. “Never before in my professional life had I encountered as many stumbling blocks as I did during the privatisation of MOBC,” Ellul told the court during the compilation of evidence against Francis Portelli and Anthony Cassar.

With Sammut serving as a consultant to Tancred Tabone after his position as chief executive of MOBC came to an end in 2003, Ellul claimed that both men had created stumbling blocks to prevent the government’s attempts at privatising MOBC. He said that upon learning that the two men had in fact been silent shareholders in IBOL – a fact revealed during the compilation of evidence in May – he decided to approach the investigating police officers with information.

Ellul said that Tabone and Sammut would ignore his instructions during the privatisation deal, or even do the opposite of what he requested. “The situation escalated to a point where in 2003, Sammut drew up a report and passed it on to ministers John Dalli and Austin Gatt, responsible for the oil sector at the time, and eventually the privatisation of MOBC was abandoned following Sammut’s advice.

Sammut claimed in the report it was not in the government’s interest to sell MOBC, or the country would not be able to meet EU obligations to have adequate reserves of oil “in case of emergency.”

Co-accused Anthony Cassar, owner of Cassar Shipyards, also revealed under arrest that Sammut was the silent partner in IBOL between 2002 and 2005, before being paid off and kicked out of the com- pany. Tabone, a silent partner since 2002, later became a visible share- holder in the company in 2008.

Sammut was kicked out when he was accused by co-shareholder Francis Portelli of stealing money, and paid US$500,000 over three years, as the value of his 25% share on three IBOL ships.

According to a prosecuting of- ficer, Sammut told police that IBOL was formed by Portelli and Tabone when it was believed that MOBC would be ending its operations.

Sammut has also claimed that a Swiss bank account was opened to receive eight payments of some US$80,000 from Trafigura, and that Tancred Tabone had requested half of the money paid.

Sammut also admitted setting up four offshore firms registered in the USA, Panama and Hong Kong.