Schembri, Sladden, Hillman set up Cypriot company for transactions to BVI offshore

The Prime Minister’s chief of staff Keith Schembri has been revealed as a shareholder in the Cypriot company through which one of the subcontractors on the €30 million Progress Press relocation and refurbishment, Pierre Sladden, would have moved €900,000 to his personal offshore company in the British Virgin Islands.

The Malta Independent said that the Cypriot company, A2Z Consulta, was owned jointly by three British Virgin Island offshore companies owned by Keith Schembri, Pierre Sladden and Adrian Hillman respectively. A share transfer shows equal shares owned by their BVI offshores in the Cypriot company.

Schembri had provided Progress Press with its new printing machinery in 2011 and Sladden’s Redmap had carried out works on the printing press. Adrian Hillman was at the time managing director of Allied Newspapers, the owners of Progress Press.

The newspaper said that the last transfer of shares in A2Z Consulta took place on 15 July, 2013.

The directors appearing for A2Z are nominees Bestservus, of Cyprus.

Sladden’s involvement in A2Z Consulta was revealed in the Australian Financial Review, as the company that passed on a €900,000 constitution of debt to his BVI company Blue Sea Portfolio. The company had been created by American Paul del Vecchio, who also created the BVI companies for Schembri, his partner Malcolm Scerri in the Kasco group, and Hillman.

Schembri and Hillman respectively own the BVI companies Colson Services Ltd and Lester Holdings Group Ltd. 

The Panama Papers suggest that Sladden’s Redmap ‘subcontracted’ A2Z – whose beneficial owners are the offshore companies held by Sladden, Schembri and Hillman – which in turn sub-contracted Sladden’s Blue Sea Portfolio.

A2Z’s three owners all have equal amounts of shares.

According to the Panama Papers, a sub-contracting agreement between A2Z Consulta and Blue Sea Portfolio Limited was drawn up on 4 October 2012 for quality checks and negotiations with Redmap’s suppliers. The engagement is valid for a period of 10 years. “In consideration of the due performance of the services provided by BSP, A2Z Consulta shall pay BSP €250,000 yearly, payable upon the raising of an invoice by BSP.”

In this way, the British Virgin Islands company would charge the Cypriot company for services charged to Maltese companies.

A second document dated 31 December 2014 shows that A2Z Consulta was meant to register a receivable of €900,000 from Redmap. A2Z Consulta however limited the amount assigned to the BSP to €750,000. A third document also dated 31 December 2014 states that Redmap owes A2Z Consulta €750,000, “and subsequently due to Blue Sea Portfolio Ltd”.

These agreements to assign debt and a receivable, were sent by a Nexia BT executive to a Mossack Fonseca representatives, asking to have them both signed by the BVI company. Instead of Redmap paying out this sum to Blue Sea Portfolio, the debt was transferred to Sladden’s other company P.S. & Sons Ltd, which means it was this company that had to pay the €750,000.

Sladden has denied that the payment ever materialised.

“A2Z Consulta was engaged in 2012 by Redmap to provide various services including quality checks of the business carried out by Redmap. However the business relationship never materialized and hence no payment was ever effected. Therefore as per my previous statement, no funds or monies were ever transferred. All income made by Redmap is declared with the tax authorities. I also confirm that A2Z Consulta never traded nor generated any income and is in process of being wound-up,” Sladden said.

Sladden said all the invoices issued by Blue Sea “were reversed and never honoured as A2Z Consulta did not operate or commence its activities as explained in my previous email.”

On his part, Keith Schembri told The Malta Independent that neither he, nor his companies, ever received or transferred funds from A2Z Consulta. “I or any of my companies, local or otherwise, have never received or otherwise transferred any funds from or through A2Z Consulta. Neither have I or any of my companies placed any funds into A2Z Consulta.”

Hillman said he would not discuss matters that :could be the subject of the enquiry conducted by my employers... I never benefitted, in any way, from A2Z Consulta.”

Hillman is under inquiry by an internal board summoned by the Allied group, to investigate claims that he could have received bribes from Schembri back in 2011 during the tendering for the printing machinery or supplier of newsprint to Progress Press.