Updated | Dubai company 17 Black was ‘target client’ of Schembri’s and Mizzi’s Panama set-ups

Updated at 8.15pm with Konrad Mizzi statement

Emails have been published showing financial advisors Nexia BT explain how a Dubai company 17 Black was named as a “target client” of the Panama companies set up for Keith Schembri and Konrad Mizzi.

The company, first mentioned in a cryptic post by the slain journalist Daphne Caruana Galizia in early 2017, and later reported about by The Malta Independent, was revaled to have had a total $1.6 million (€1.3 million) transferred to it.

The emails were released by the Daphne Project, an investigation by more than 18 media organisations.

Investigators from Malta’s anti-money laundering agency (FIAU) traced two payments totalling $1.4 million (€1.1 million) paid into 17 Black, from a company in the Seychelles called Mayor Trans, which is owned by an Azerbaijani national.

The $1.4 million was wired in November 2015, via ABLV, a Latvian bank recently closed down due to money laundering violations.

The report states that it was US anti-money laundering authorities who identified transactions concerning 17 Black as possible “shell company activity, suspicious wire transfers and money laundering.”

The $1.4 million payment from Mayor Trans was listed as “advisory services”.

At the time of the transactions, financial advisors Nexia BT was opening the secret Panama companies for Schembri, the prime minister’s chief of staff, and then energy minister Konrad Mizzi.

The emails state that Schembri and Mizzi were set to receive “Eur 150,000” monthly through their Panama companies, via 17 Black and Macbridge, according to details provided by Nexia BT partner Karl Cini in the same e-mail.

Mizzi has told the Daphne Project that there was no connection, direct or otherwise, between the companies and the trust, and any entity called 17 Black. “Hearnville never held a bank account, and never received any funds from any source,” a spokesman said.

Keith Schembri said he was following advice from professional financial advisers.  “Nothing my advisors did was illegal,” Schembri said.

Statement released at 6:41pm

Keith Schembri issued an email via the Department of Information stating: “17 Black and Macbridge were included in draft business plans for my business group as potential clients. My companies make dozens of business plans such as these. However, it is a fact that neither 17 Black nor Macbridge ever became clients of my business group, and no transactions were ever recorded with these companies, or with me personally. I have no knowledge of the transfers referred to, nor any knowledge of the alleged payment.”

LNG tanker payment

Another $200,000 (€161,000) payment was sent to 17 Black by Orion Engineering, the company owned by Mario Pullicino, the agent for the LNG tanker that supplies gas to the new power station.

Mario Pullicino told The Times he had nothing to add to his previous denial that Orion Engineering was involved in any payment of kickbacks linked to the LNG FSU.

Konrad Mizzi, who travelled to Dubai a month after the payment, had denied having opened a bank account there.

But the revelations in the Panama Papers show that at this time, Nexia BT were trying to open up bank accounts all over the world for Schembri’s and Mizzi’s Panama companies.

The revelations are said to have been drawn from the FIAU’s 110-page report into Konrad Mizzi's financial dealings that were leaked while the investigation was ongoing. Nationalist MEP David Casa presented the leaked report to the magistrate conducting the Egrant inquiry last February.

According to Nexia emails, the company accounts for Tillgate and Hearnville would generate “around USD2m” within a year.

Nexia BT partner Karl Cini says in the emails that 17 Black and another company called Macbridge would be paying in money to accounts at Winterbotham bank in the Bahamas, which the now-shuttered Panamaniam law firm Mossack Fonseca was entrusted to open.

Cini tells Mossack Fonseca in an e-mail dated 17 December, 2015, that the Panama companies would be operating in the maritime and fisheries sector in Bangladesh, tourism in Asia, infrastructure projects in African countries, Indian and the subcontinent, as well as recycling and remote gaming.

Additionally, Cini says in the email that the two Panama companies were owned by trusts in New Zealand, and distributions to these trusts would be made “every now and again”.

Attempts to open the Bahamas account stopped in February 2016, when slain journalist Daphne Caruana Galizia first started hinting on her blog that she knew about their shell companies. The companies have since been shut down.

Both Schembri and Mizzi deny any wrongdoing and that no bank accounts were ever set up for their Panama companies. The two men are resisting a magisterial inquiry into their Panama dealings.

Statement by Konrad Mizzi released at 8.02pm

Tourism Minister Konrad Mizzi has described the reports as "a repetition of unfounded allegations and speculation made prior to the June 2017 elections".

He reiterated that there is "no connection, direct or otherwise" between him, his company or trust, and any entity called 17 Black. Mizzi said his Panamanian company Hearnville Inc. held no bank account and received no money from any source.

Mizzi said that he recently answered questions by journalists from the Daphne Project, in "a frank and open manner", stating that he  does not know an Azeri national identified by them as having made a payment in favour of 17 Black. The minister added he also had no knowledge of a payment allegedly made by Orion Engineering Group to 17 Black.

Mizzi said that an independent audit into his trust and company structure, which he commissioned in the wake of the Panama Papers revelations, had concluded the structure was solely intended as a family trust. The audit also established that no trading activities were undertaken by the tust and its fully owned subsidiary Hearnville Inc and that no bank accounts were held by the trust and company.