Updated | Security Services started Aikon probe, finance minister says

Finance Minister Tonio Fenech has declared that it was the Malta Security Services that passed on information related to George Farrugia's oil trading company Aikon to his secretariat, in an investigation on tax evasion and money laundering that they were conducting.

FULL STORY MFSA docs that showed Farrugia owned Aikon in January 2011

The information was passed on by MSS head Godfrey Scicluna to his head of secretariat Alan Caruana.

Fenech denied yet again knowing George Farrugia or having met him in any social or government setting. "I never saw the documents that were handed to the TCU and it was the first time since being appointed to the Cabinet that the head of the secret service has asked for an investigation in tax evasion. I'm not in a position to answer whether this was part of a wider investigation, whether the invoices published were part of the investigation, or whether the head of the Security Service got the documents from a third party."

Fenech today said that the Tax Compliance Unit's investigation - which started in August 2011 - dealt with invoices covering the period 2004-2010, and as such the investigation covered those shareholders and directors of Aikon during this time, as well as after this period.

However, Fenech's explanation has not yet confirmed why the TCU did not link Aikon's tax evasion to businessman George Farrugia, who had transferred the company's entire shareholding from Intershore Fiduciary Services in January 2011 - seven months before the investigation started.

The minister's comment puts the onus of the error on the TCU for not having detected Farrugia's ownership of the company earlier. He also said that the investigation was at an advanced stage, but said the investigation concerns a wider number of companies.

In fact, Fenech has already gone on record saying there was nothing to connect Aikon to Farrugia at the start of the investigation by the TCU, when the news was broken by the Sunday Times. But MaltaToday today revealed the company document showing Farrugia's ownership of Aikon back in 2011.

In another press conference, held while Fenech was accompanying the prime minister in Birkirkara, Labour MPs Michael Falzon and Chris Cardona claimed that the finance minister - being responsible for Enemalta and also taxation - should have heard the alarm bells ring when receiving the file and its invoices, connecting it to Aikon's own activities in the oil industry and handed the matter to the police instead.

Aikon director George Farrugia will turn State's evidence to testify on the alleged kickbacks paid by Trafigura, whom he represented, to a former Enemalta consultant for the supply of oil to the state utility Enemalta; police have so far questioned former MOBC chief executive Frank Sammut, former Enemalta chairman Tancred Tabone, and Tabone's partners in the company Island Bunker Oils, Francis Portelli and Anthony Cassar.

Fenech today insisted with MaltaToday that the invoices published in MaltaToday showing payments from Trafigura for commissions related to the sale of oil to Enemalta "are now more than likely the same ones" that were passed on to the TCU.

"The invoices were incomplete. The Tax Compliance Unit did not realise that things had changed. Apart from Aikon there were other companies being investigate," Fenech said when asked about company documents that show Farrugia took sole control from the fiduciary company in January 2011.

On their part, Michael Falzon and Chris Cardona's questions as to whether Fenech was present for the Cabinet meeting that granted the presidential pardon to Farrugia, were replied by the minister who said he was not absent from the meeting while attending a Xarabank programme.

Chris Cardona said finance minister Tonio Fenech's claims that he was not aware that Farrugia was the company director of Aikon were a "blatant lie."

"I have no power to interfere in the Tax Compliance Unit, and the TCU has no obligation to inform on the investigation. The investigation is still ongoing," Fenech told MaltaToday.

The Labour MPs have also asked whether Fenech should have passed on the file to the police, seeing the need to investigate it further due to Aikon's connection to the oil industry.

"Seven months earlier, it was already clear that Farrugia was a director and shareholder of the company - so why wasn't Farrugia himself investigated personally? How could the alarm bells not ring when the TCU file contained invoices on the purchase of oil?" Cardona asked.

The company Aikon was ostensibly registered with the fiduciary company Intershore when Farrugia was still importing oil through family business Powerplan. His brothers from the John's Group of Companies later instituted a civil case against Farrugia when they realised that he had siphoned off millions in oil revenues from Powerplan. The matter was settled out of court, and Farrugia became sole shareholder of Aikon in January 2011.