Dubai companies ‘target clients’ of Panama companies, according to FIAU report excerpts

Nexia partner Karl Cini would have described Dubai companies set up by LNG tanker owners as ‘target clients’ of Mizzi and Schembi offshore companies

The excerpts of an alleged report by the Financial Intelligence Analysis Unit – published by The Malta Independent – suggest that Nexia BT partner Karl Cini had described two Dubai companies as the “target clients” of the two Panamanian companies set up by Keith Schembri and Konrad Mizzi.

According to the excerpts, part of a 120-page report which the FIAU itself has said is unfinished and whose conclusions are not what has so far been reported, the Dubai companies 17 Black and Macbridge were described as target clients of Tillgate Inc. and Hearnille Inc – the offshore companies that Cini set up for the Prime Minister’s chief of staff and former energy minister.

It is unclear who set up these companies in the first place, but a transaction was expected to take place between Orion Engineering Group to 17 Black.

Orion Engineering’s owner Mario Pullicino happens to be the company secretary of Armada Floating Gas Services Limited, one of three companies set up in Malta by the owners of the LNG tanker moored at Delimara. Attempts by MaltaToday to contact Pullicino have so far proved futile.

Two transactions were said to have been attempted on 10th July 2015 and finally, a successful one on 23rd July 2015.

Both Mizzi and Schembri have insisted that none of their companies ever traded or set up a bank account, but emails in the Panama Papers show that Nexia BT was searching for several international banks to open an account for their offshore set-ups.

Armada Floating Gas Services provides the LNG tanker subcontracted by the ElectroGas consortium, which built Malta's 200MW gas plant.

The other details of the FIAU probe suggest further investigation was needed to resolve what it claimed were suspicious activities.

Shanghai trip

Konrad Mizzi travelled to Shanghai “two days after the incorporation of SEP (Malta) Holding Limited” which was registered on 4 December 2014. His wife Sai Mizzi Liang was already residing in Shanghai at the time, as consul for Malta.

But the FIAU points out that Mizzi travelled to China 17 times between 10 September 2013 and 24 March 2016, a fact gleaned from credit card records. The FIAU pointed out that the card transactions show Mizzi stayed in hotels for 16 visits “despite having family in China”.

Because of this, the FIAU says “the volume of trips to China at a time when Malta and China were already already signing deals in relation to Enemalta raises suspicion.”

Reasons for offshore set-up

In 2015, Karl Cini started to try to set up a bank account for Konrad Mizz’s Hearnville Inc. The FIAU says this is suspicious because the company was originally set up in 2013 and since then placed in a trust. “This sudden persistence in opening a bank account for the Panamanian company at significant costs coincides with the time when the required domestic company corporations, deals and agreements in relation to the privatization of the Enemalta Corporation were nearing completion/completed,” the FIAU suggests.

It then opines that the cost of setting up Hearnville and the Rotorua trust in New Zealand was incompatible with Mizzi’s wealth: in 2014 he declared a London house with rental value of £20,000 annually; a Sliema apartment still on mortgage; €310,000 in bank deposits, although the FIAU found only €92,000 in a joint account with Sai Mizzi; 4,000 shares in MIA plc; and in 2015 again in his parliamentary declaration he declared €389,440 in bank deposits, but the FIAU said this was “not in line with the sums identified in this analysis.”

The FIAU felt that the costs of setting up and maintaining such a structure “would outweigh any financial benefit derived solely from the property in the UK.”

Mizzi paid €4,839 to BTI Management (a Nexia firm) and $5,235 to set up Rotorua in New Zealand: the FIAU claimed that the €9,700 fees and annual fee for the trust services provider, “show that such a set-up is too costly to justify it being used simply to hold a property in the UK which is expected to generate rental income of approximately GBP20K per year and average bank deposits of €92,000 which are not even held in Dr Mizzi’s sole name.”

The FIAU also suggested that Mizzi “who claims to be a well-off individual” would have opted to create his complex offshore structure after the birth of his children in 2007 and 2010 if he “wished to protect his assets for his family’s benefit”.

Dubai travel

The FIAU also noted that Konrad Mizzi “personally travelled to Dubai” in order to present a bank with the relevant documentation, and then asks why the house in London was not placed in the trust immediately “rather than leaving such a costly structure with no assets”.

It is not clear whether the bank was Noor Islamic Bank Dubai, the same bank namedropped in the context of 17 Black – the events are not connected in the FIAU report.

Torbirdge Services Inc.

This company was set up by Nexia’s Karl Cini for Chinese national Cheng Chen, who formed part of a due diligence and negotiating team supplied by Accenture - the consulting firm retained by the Chinese government to help Shanghai Electric Power on its Malta deal to acquire a 33% stake in Enemalta. Cheng Chen took ownership of the company in 2014.

The FIAU said that Karl Cini delivered documentation on Torbridged to Pilatus Bank personally, and that initial funding in Torbridge’s account would start in August 2015 and reach €1 million by the end of the year. “However following initial adverse media reports in February 2016, no such activity ever took place on the account.”

More in National

Get access to the real stories first with the digital edition