Daphne Project: BVI investigated companies set up by Nexia BT for Maltese clients

The British Virgin Islands’ Financial Investigation Agency (FIA) was investigating four companies set up by Nexia BT, through the corporate service provider Mossack Fonseca, back in 2016, according to the latest revelations from the Daphne Project.

Correspondence between the FIA and Mossack Fonseca just after the Panama Papers were published shows the agency requesting information on the companies Willbery Trade Inc., Colson Services Limited, Selson Holding Corp., and Lester Holdings Group Ltd.

The companies are owned by Nexia BT managing partner Brian Tonna, OPM chief of staff Keith Schembri, his business associate Malcolm Scerri, and former Allied Newspapers managing director Adrian Hillman respectively.

When MaltaToday contacted Tonna regarding the investigation, and asked what the purpose and outcome of the investigation was, and whether other companies set up by Nexia BT were investigated following the Panama Papers leak, Tonna said he found out about the probe through this morning's media reports.

"Prior to the publication of the article on the Times of Malta which you refer to in your email, I had no knowledge of investigations being carried out by the BVI authorities, which should answer your first six questions," Tonna told MaltaToday.

Regarding any other investigations into companies set up by Nexia BT, Tonna said he was precluded at law from replying because this "would not only amount to the offence of tipping-off, but would also be in breach of my obligations of client confidentiality and professional secrecy".

The leaked email was obtained by German paper Süddeutsche Zeitung and published on Tuesday morning in the Times of Malta. Both newspapers are partners in the Daphne Project.

“The Financial Investigation Agency regards the information being requested below as relevant to the performance of its function under the Financial Investigation Act 2003 in relation to the investigation of a financial offence including money laundering,” Nizbeth Madur, a money laundering reporting officer at the FIA wrote to Mossack Fonseca.

The BVI agency requested information on the companies’ ultimate beneficial owners, registered directors and shareholders, due diligence records for the companies, as well as details of bank accounts or assets held by the companies, details of any connected companies, a copy of the companies’ certificate of incorporation, as well as details on any settlor or trustees.

The ultimate beneficial owners of the companies became known after the Panama Papers – a cache of 11.5 million documents from corporate services provider Mossack Fonseca - were published at the start of April 2016.

Keith Schembri reacts

In a statement on Tuesday, Schembri referred to the story as “mostly recycled”, adding that his company Colson had been incorporated “years” before his appointment as chief of staff.

“[The story], probably inadvertently, confirms what I have been saying from the start regarding the commercial scope of my company structures,” Schembri said.

“As the story itself implies, the competent authorities have looked into the structures and affairs. According to your [the Times of Malta] report, they found nothing to comment further about since then. In fact, this so-called 2-year-old ‘probe’ was not even brought to my attention,” Schembri said.

He added that was the “proper function of rule of law, as compared to the Time’s assumption of guilty by mere implication, which the same papers seems to want to desperately cling to”.

It remains unclear though, what the result of the BVI investigation was and whether it formed part of a wider probe triggered by the Panama Papers on companies set up in the overseas UK territory.

In May 2017, then Opposition leader Simon Busuttil had testified before magistrate Aaron Bugeja, who is leading the Egrant inquiry, with information relating to the transfer of  €100,000 from Willerby Trading Inc, which is owned by Tonna, to Schembri’s bank account at Pilatus Bank. A report by the Financial Intelligence Analysis Unit had flagged the two transactions of €50,000 as suspicious.

The implication was that the money from Tonna to Schembri was a kick back over the sale of passports to Russian individuals. The pair have denied the accusation, insisting that the payments were in settlement of a private loan Schembri had given Tonna.