Updated | Magistrate says ongoing 17 Black inquiry should be extended to Panama Papers

An inquiry requested by former Opposition leader Simon Busuttil and civil society group Repubblika into Konrad Mizzi and Keith Schembri over their Panama companies can go ahead

Konrad Mizzi (left) and Keith Schembri (right) opened companies in Panama: The court has ruled that an inquiry into their actions can start
Konrad Mizzi (left) and Keith Schembri (right) opened companies in Panama: The court has ruled that an inquiry into their actions can start

Updated at 4.20pm with government reaction

A fresh request for an inquiry into the Panama Papers and the actions of Konrad Mizzi and Keith Schembri has been upheld by the court.

Magistrate Doreen Clarke on Monday accepted the request filed by former Opposition leader Simon Busuttil and civil society NGO Repubblika for an inquiry into the minister and the Prime Minister’s chief of staff.

The ruling means that an inquiry to establish the facts of what is being alleged can start, however, the magistrate also ruled that this should be carried out within the inquiry started last year by Magistrate Charmaine Galea into allegations surrounding the Dubai company 17 Black.

A similar request for an inquiry into Panama Papers made after the 2017 election had been accepted but was eventually thrown out on appeal.

On twitter, Busuttil described the decision as “one small step for justice and one giant leap for Malta”.

The court application was filed last March after the first application filed shortly after the 2017 election was thrown out by the court of appeal last January.

In a renewed attempt, Busuttil and Repubblika, argued that Malta’s institutions had “flagrantly and consistently” failed to act against Mizzi and Schembri over the three-year period since the Panama Papers leak.

Both had been found to have opened companies in Panama and in turn made several attempts to open bank accounts for the companies.

Documentation also showed that both companies had as a target client, a Dubai-based company called 17 Black, which later turned out to belong to businessperson Yorgen Fenech, a part-shareholder in the gas power station company.

In the 77-page-long application, Busuttil had argued that the “institutional paralysis” preventing an investigation into the Panama Papers scandal breached EU law.

Busuttil had alleged the secretive offshore structures were intended to launder money and that incontrovertible evidence still existed in the shape of paper trails and electronic correspondence found on computers and servers in several offices in Malta.

Last January, the appeals court presided by Judge Giovanni Grixti ruled against a request for an inquiry into the Panama Papers.

Before that, a magistrate had ruled in favour of an inquiry but the decision was appealed by the people indicated by Busuttil, including Prime Minister Joseph Muscat, Mizzi and Schembri.

The appeal dragged on after Busuttil objected when it was assigned to the now-retired judge Antonio Mizzi.

The case eventually ended up in Grixti's lap after Mizzi retired and in a ruling this year said the allegations made by Busuttil were "speculative" because they were based on his views and that of third parties without clearly indicating what and who committed the criminal behaviour.

In the latest twist in this saga, Clarke has now ruled in favour of an inquiry but this should be carried out within the context of an ongoing inquiry on 17 Black to avoid duplicity.

READ ALSO: Why a Maltese judge threw out Simon Busuttil’s complaint for a Panama Papers investigation

Government insists no new inquiry will be held

In a statement the government described the court’s ruling as a “slap in the face for Simon Busuttil and his friends” after the magistrate did not order a separate inquiry.

“The magistrate said that no other inquiry should be started but a note should be registered in the acts of another inquiry so as to avoid duplicity of procedures,” the government said.

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