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[WATCH] Muscat denies prior knowledge of chief of staff’s Panama company

Prime Minister denies having known of Keith Schembri's Panamanian-registered company before it was leaked to the press, says he 'doesn't like interfering in people's personal businesses' 

tim_diacono
Tim Diacono
4 March 2016, 3:50pm
Prime Minister Joseph Muscat addresses the press at the Labour HQ. Photo: Chris Mangion
Prime Minister Joseph Muscat addresses the press at the Labour HQ. Photo: Chris Mangion
 
Muscat says he first learned of chief of staff's Panama company from the media. Video: Chris Mangion
Prime Minister Joseph Muscat insisted that he only found out that his chief of staff Keith Schembri owns a company in Panama when the information was leaked on the media.

“I had known that Schembri had international financial set-ups and that he had owned companies and trusts, but I hadn’t known where they were registered,” said. “I don’t interfere in people’s personal businesses. What’s important to me is that he resigned as director from his companies after becoming chief of staff.” 

Muscat was speaking to the press at the Labour headquarters in the wake of a scandal involving Schembri and energy and health minister Konrad Mizzi who both admitted to owning a company registered in Panama – a notorious tax haven – and a trust fund in New Zealand. 

Mizzi has since announced that he will close down his company, following an audit by the Inland Revenue Commissioner.  

“He chose to close down his Panama company after listening to public opinion,” Muscat said. “If he hadn’t closed it down, you [the press] would have criticised him for not having closed it down.”

Mizzi had origianlly said that the Prime Minister “wasn’t shocked” when he had informed him of his controversial financial set-up some three weeks ago, but Muscat admitted earlier this week that his minister “could have made a better choice” when opening a company in Panama.

When asked what exactly he had told Mizzi, Muscat said that he had told him to make sure to declare everything in his annual declaration of assets in parliament.

“The crucial point is that Mizzi will declare everything, unlike [former PN minister] who had failed to declare a Swiss bank account, and that the financial set-up is being governed by New Zealand,” he said.

Indeed, he accused the Nationalist Party of “bringing the issue up now because it had known that Mizzi was going to declare the set-up in parliament in time for the end of the March deadline”.

Mizzi’s Panama links were first revealed on the blog of Malta Independent columnist Daphne Caruana Galizia.

‘We have a right to continue using Nexia BT’s services’

Mizzi has confirmed that he was advised on his Panama-New Zealand set-up by finance firm Nexia BT. When asked whether government will continue to make use of the firm’s services following this scandal, Muscat said that it will keep its options open “for as long as [Nexia] are allowed to operate in the country.”

He brushed aside a decision by E-Cubed Consultants – whose director is leading economist Gordon Cordina – to pull out of a merger with Nexia due to its role in the Panamagate controversy.

“I don’t know why Cordina chose to pull out of the merger, but that’s his own business,” Muscat said. “I’m not Nexia’s lawyer.”

“So long as [Nexia] is allowed to operate here, then I think that everyone –including government - has a right to make use of its services,” he said. “We don’t have an exclusivity deal with any finance firm and indeed work extensively with the Big Four firms [Deloitte, PWC, EY and KPMG].”

He also hit out at Ann Fenech, the president of the PN’s executive committee, who on Wednesday deflected criticism over the over €1 million in direct orders received by Fenech & Fenech – of which she is a managing partner – under PN administrations.

“My company’s expertise in maritime services is sought by multinational companies, and even by the current Labour government,” she said.

“Ann Fenech must decide whether she wants to accuse this government of corruption, when she herself had formed part of a corrupt Nationalist government, or credit it for hiring her firm.”

tim_diacono
Tim Diacono is a journalist at MaltaToday
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