Keith Schembri’s latest explanation today of his network of offshore companies flies in the face of his original statement when the Panama scandal first broke out two years ago.
Reacting to stories published today by German paper Süddeutsche Zeitung and the Times of Malta, the Prime Minister’s chief of staff said the reports “confirm what I have been saying from the start regarding the commercial scope of my company structures”.
However, when Daphne Caruana Galizia in February 2016 revealed the existence of his Panama company and the New Zealand trust that held it, Schembri’s initial reaction was to state he had set up the structure for family planning purposes.
“After taking up my current job, I stepped down from directorships on my companies and consolidated my structures by opening a family trust both locally and abroad,” Schembri’s statement back then said. “At the same time, all my companies are being managed by a team of professional executives. I do not get involved in decisions taken by my companies’ directors and allow trustees to make decisions at arm’s length about my holdings.”
He also said he set up his trust in New Zealand because he was informed that his local bankers were considering siphoning off their trust businesses to third parties and threatened to take legal action to safeguard his family’s interests.
Schembri’s initial explanation that his Panama company had been set up for family planning was identical to the explanation provided by Konrad Mizzi for his own offshore structures. However, while the Tourism Minister has stuck with this story despite email evidence indicating otherwise, Schembri’s version of events changed somewhere along the line and said he set up his structure to expand his business interests. Prime Minister Joseph Muscat has yet to comment about this contradiction in the two men’s versions of events.
The Süddeutsche Zeitung and the Times of Malta, contributors to the Daphne Project, today published an email that the anti-money laundering agency of the British Virgin Islands had sent Panamanian law firm Mossack Fonseca in April 2016 to demand information about four BVI companies owned by clients of Maltese financial advisory firm Nexia BT.
These were a company called Colson that Schembri had set up in 2011, and three other companies owned by Nexia BT boss Brian Tonna, former Allied Newspapers managing director Adrian Hillman, and Schembri’s business partner Malcolm Scerri.
An email published by Daphne Caruana Galizia shows that Schembri had taken steps to conceal his ownership of this company through nominee directors and shareholders after he was appointed OPM chief of staff in 2013.
Caruana Galizia had reported that Schembri had failed to declared this set-up to the Maltese tax authorities, and the OPM chief of staff has yet to deny this claim.
Keith Schembri demanded more secrecy for his BVI company after he was appointed Muscat’s chief of staff
In his statement today, Schembri referred to his wide-ranging and one-secret network of offshore companies and trusts in a nonchalant fashion – as though it was a normal thing for the Prime Minister’s chief of staff to own.
“Reference is made to the mostly recycled story published on the Times regarding my company Colson which was incorporated years before my appointment of Chief of Staff of the Prime Minister, and which, probably inadvertently, confirms what I have been saying from the start regarding the commercial scope of my company structures,” he said. “As the story itself implies, the competent [BVI] authorities have looked into my structures and affairs and according to the report, they found nothing to comment further about since then. In fact, this so-called two-year ‘probe’ was not even brought to my attention.”
Schembri is the subject of two magisterial inquiries into alleged money laundering – one into alleged kickbacks he had received from Brian Tonna on the sale of citizenship to three Russian nationals and another into an alleged kickback to Adrian Hillman as a commission on printing equipment Schembri had sold to The Times. Former PN leader Simon Busuttil’s request for a vast-ranging magisterial inquiry into the Panama Papers is locked in a legal battle.
Busuttil and PN MEP David Casa recently requested yet another magisterial inquiry – this time into the mysterious Dubai company 17 Black which, according to a leaked Nexia BT email, was supposed to transfer funds into Schembri’s and Mizzi’s Panama companies.