Updated | Schembri denies any control on Panama offshore before 2015

Report claims Maltese advisory firm began setting up Panama companies for senior members of the Labour Party, just five days after the March 2013 election • OPM chief of staff Keith Schembri denies exercising any control on his offshore company in Panama before July 2015

A Malta advisory firm began setting up Panama companies for senior members of the Labour Party, just five days after the general election in March 2013.
A Malta advisory firm began setting up Panama companies for senior members of the Labour Party, just five days after the general election in March 2013.

The Prime Minister’s Chief of Staff, Keith Schembri, has “categorically denied” exercising any control on his offshore company in Panama before July 2015.

Schembri said he acquired Tillgate Inc on July 2 solely for the purposes of its settlement into the New Zealand Trust, Haas Trust, and was intended solely for estate planning.

“Beyond this, I have no knowledge of any prior company activities save the fact that the company has never traded to date” he said.

Schembri’s comments come in the wake of a report by the Australian Financial Review which reported that Nexia BT – the Maltese advisory firm which advised energy minister Konrad Mizzi to set up his New Zealand trust and to acquire a Panama company – began setting up Panama companies for senior members of the Labour Party five days after the March 2013 election.

Quoting leaked documents of Panamanian law firm Mossack Fonseca, the report says document show that "a wider group of Maltese business figures who are regarded as allies of Prime Minister Joseph Muscat used offshore companies", ostensibly in reference to Keith Schembri.

But in a right of reply, Schembri denied exercising any control on his offshore company in Panama before July 2015.

“The fact that you fail to mention and refer to such facts, documentation and evidence shows the malicious intent of the author, who clearly is attempting to present a false state of affairs through a collage of unrelated facts.”

The OFM chief of staff said it was inconceivable that a journal would allow comments attempting to link unmentioned “business figures” to the Government without any substantiation or the faint attempt to corroborate it in fact.

“The tone, scope and elaborate insinuations coupled with the deceit with which facts are treated are intended solely to tarnish my reputation and attribute to me intentions or actions which are not based on the truth.”

“I welcome legitimate, accurate and fair criticism and the right of freedom of expression and the freedom of the media but only if the information is correct and corroborated as it is not in the general public’s interest to be misled,” Schembri said.

Earlier, the Australian Financial Review claimed that on March 14, 2013, Karl Cini, a partner at Nexia sent an email to Mossack Fonseca’s Panama office, and again sent an email seven days later to enquire about “setting up a Panama company and possibly a trust.”

The ultimate beneficial owner (UBO) for the Panama company and trust "will be an individual and I will speak to Luis on Skype to give him more details", Mr Cini wrote.

The report claimed that Cini then turned to three companies in the British Virgin Islands that Mossack Fonseca managed and then said that on January 24, 2011, an American financial intermediary, Michael Del Vecchio, had set up a British Virgin Islands company for Schembri called Colson Services Ltd.

The report also said that Mr Del Vecchio had set up Selson Holding Corporation for Malcolm Scerri, who runs Mr Schemri's Kasco industrial group, and that on May 10, 2011, Adrian Hillman, the managing director of Allied Newspapers Ltd, also got a company in the British Virgin Islands, Lestor Holdings Group Ltd.

It claimed that Schembri and Hillman were both long-term account clients of Nexia BT – and now Nexia was emerging as the middleman at the expense of Del Vecchio.

The report said that at some point, Cini wrote that he would need “for each company a [nominee] director and a nominee shareholder is appointed [sic]” – a move which according to the Australian Financial Review would remove Schembri’s and Hillman’s name from the records, making them even harder to find.

The report says that on August 8, 2013, Mossack Fonseca came through with Cini’s order for a Panama company, but by then the order had grown to three companies: Tillgate Inc, which would be controlled by Schembri; Heanrville Inc, which would be controlled by Konrad Mizzi, and a third company, Ergant, but this one had no details of its owner.

On paper all three were controlled by Mr Cini and a Nexia senior partner, Brian Tonna, under a power of attorney. The person controlling the third company did not matter in the short term as the companies were envisaged to lay dormant for a year as the Maltese investors targeted New Zealand trusts.

On December 4, 2014, Cini told Mossack Fonseca he would be setting up two New Zealand foreign trusts, which would own the Panama companies set up for Mizzi and Schembri.

And in May 2015, Cini’s clients had their documents ready to go ahead with their trusts. Haast Trust was set up for Schembri’s company, Tillgate, while Rotorua Trust was set up for Hearnville, which was Mizzi’s.

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