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Egrant Exposed Part 2: Dissecting The Evidence

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It’s hard to keep up with the current political crisis. There’s a lot of noise out there and it’s easy to get confused in the “he said, she said” of it all. But the good thing about detailed allegations is that they provoke detailed reactions. And that’s usually where the devil lies.

Lovin Malta has spent the past week trying to analyse the veracity of the documents published by Daphne Caruana Galizia which claim the Prime Minister’s wife Michelle Muscat is the ultimate beneficiary of a mysterious company in Panama called Egrant. Without Caruana Galizia’s documents in hand, we chose to dissect the defence mounted by Joseph Muscat and Brian Tonna, the accountant at the centre of the story, and we sought to fact-check their statements to prove their innocence.

This is a rundown of how their version of events has changed in the past seven days as we questioned the veracity of their statements and documents with the help of a team of experts. Before you go any further, take the time to read through all the background in our previous article. It will make it easier to understand what’s happening in this one.

Thursday 20th April

After a week of build-up, blogger Daphne Caruana Galizia claims that shares in a Panamanian company called Egrant Inc are held for Michelle Muscat, the Prime Minister’s wife.

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Friday 21st April

Flatly denying the allegations, Prime Minister Joseph Muscat challenges Opposition leader Simon Busuttil to a live TV debate on Xarabank. Before it starts, Caruana Galizia publishes the transcripts of two Declarations of Trust which name Michelle Muscat. The Declarations of Trust, dated August 2015, are from two companies – Aliator and Dubro – which each hold a share in Egrant for Michelle Muscat.

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During the debate, Joseph Muscat claims Caruana Galizia’s declarations were falsified. Before reading further, watch this key part of his explanation:

A strong reaction from the Prime Minister. But note the two main points he is making:

1. Muscat presents a share certificate which shows the company Egrant was given to Brian Tonna in 2013. We’ll explain the problem with this document soon. (Keep in mind that Brian Tonna is the head of Nexia BT who set up the financial structures of the two other companies belonging to the Prime Minister’s closest aides Keith Schembri and Konrad Mizzi.)

2. Muscat says it cannot be possible for the same people who sold the company to Brian Tonna in 2013 to have sold it again to his wife in 2015.

Note: This is the first tell-tale sign of Muscat being economical with the truth. Nobody said Egrant was sold to Michelle Muscat, only that she was the beneficiary. But let’s move on for now.

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Saturday 22nd April

Brian Tonna issues a statement to the press, presumably to clarify some of the matters Muscat made the night before. He attaches the same share certificate Muscat presented, and gives his own timeline of events. He confirms that the original “subscribers” of Egrant Inc, when it was incorporated on July 4th 2013, were in fact Dubro and Aliator. But he claims that five days later, one share was issued in favour of a third company: ATC Administrators.

“As a result, Dubro and Aliator ceased to be shareholders in the corporation,” he wrote.

Note: By issuing a share to ATC Administrators, Dubro and Aliator do not automatically “cease to be shareholders” in the company. This only happens if their shares are cancelled or transferred, which was never spelled out. But let’s keep going.

Brian Tonna continues: “This does not mean that they remained shareholders after 9th July 2013: they did not. In fact, under Panamanian law, changes in shareholding are not publicly recorded, and so the public register continues to show only the original subscribers.”

“Changes in shareholdings are only recorded in the corporation’s internal register, and they are evidenced by share certificates issued to shareholders.”

He attaches a share certificate as well as a share registry (which is meant to be the entire history of the company’s shareholder but strangely in this case is not dated and does not have the signature of any director).

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Monday 24th April

Lovin Malta, together with its team of wonderful experts, realises something is wrong with the share certificate. It is numbered #1. But since share certificates are numbered sequentially, and since according to both Muscat and Tonna, the first shareholders were Dubro and Aliator, this certificate – if authentic – should have been numbered #3.

Tuesday 25th April

We sent out an email to Brian Tonna at half past midnight on Tuesday morning.

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We published our findings in the morning (scroll to Point 22).

At 10.55am, we sent another email to Tonna to ask if he received the first one since we did not yet receive any acknowledgement.

Two hours later, he replies:

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Note: His version has changed from the one he gave on Saturday. Suddenly he’s saying Dubro and Aliator were never shareholders, so the share certificate was correct to have been numbered #1.

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This was our reply:

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Note: We asked for two documents, both of which are not held by a public register and can in theory be manufactured and post-dated. But they are crucial documents to confirm why the share certificate was numbered as #1. Also, this is the second time we have asked for a proper share register which should contain the history of how shares were distributed.

We sent the email at 12.30pm and asked for a reply by 4pm. At 9pm, we receive this reply, asking for more time:

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Wednesday 26th April

By noon, we still haven’t received word about the waiver that could prove Dubro and Aliator never owned a share in Egrant. Without it, there are serious doubts about the veracity of the share certificate the Prime Minister presented on Xarabank. But we also have a few more questions to help us get to the bottom of things, so we send another email asking for other documentation that can verify the claims that Dubro and Aliator were never shareholders until Egrant dissolved.

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Six hours later, we get what looks like a detailed response to our two previous emails. This one will be produced word for word in text so that we can add our notes:

Dear Mr Peregin

Apologies for the delay, but I am sure you will understand. Here are the answers:

Q: We understand that subscribers in Panama can resign their right to be issued with shares on incorporation by means of a waiver. Can you send us a copy of such waiver?

A: Your understanding is correct. In the circumstances as they have developed, we will, at this point, be giving access to this document to the Magistrate.

Note: He does not send us the waiver. He does not say what the waiver contains. He just says that we’re right about the need for a waiver to prove his point. And he says he will be giving access to the Magistrate who is investigating.

Q: Even though Dubro and Aliator may have resign their rights to own shares in Egrant, they may have still become shareholders in a second instance. Can you please send us copy of the share register?

A: Your understanding is once again correct (even if the possibility is implausible). In point of fact, Dubro and Aliator did not become shareholders. Only ATC did, as Brian Tonna’s nominees. This is evidenced by the share register, a copy of which has already been provided.

Note: He sends an undated register. And he does not explain why he originally referred to Dubro and Aliator as shareholders.

Q: Can you please send a resolution of shareholders passed on or after the 9th January 2017, resolving to liquidate the company?

A: The resolution is attached. This was preceded by a proxy signed by Brian Tonna (see attached) to appoint any lawyer at Mossack Fonseca to represent him for the dissolution process (that would include the meeting of the shareholders to approve the dissolution).

Note: The proxy is signed in Brian Tonna’s personal name as “beneficiary” and does not name the company of which he is beneficiary. In these circumstances, it should have been ATC asking for a proxy, not Brian Tonna personally.

Q: Crucially, can you please send us a register of shareholders with the same date as the resolution to resolve to liquidate the company, certified by a director of the company?

A: This document was not produced at the time as it was not considered necessary. This is because there was never a change in the only shareholder, being ATC, nor in the UBO, who was known to the lawyers as Brian Tonna.

Note: A share registry can be produced at any time and once again, he fails to present it.

Q: Can you send us an extract of the Panama registry of companies showing the directors of both Egrant and ATC Administrators?

A: I do not have access to the Panama registry of companies but the following site can provide some information: https://opencorporates.com

A recent data download by Maltatoday (and published-see attached) contains more information about Egrant Inc’s public registry entries.

Thanks and nice evening

Brian

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Note: There is one really interesting document that Tonna included in his attachments, the articles of incorporation document of Egrant, when Dubro and Aliator set up the company. It’s a long document but it has one very important paragraph:

Each of the subscribers of these Articles of Incorporations agree to take one (1) share.

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Remember, of all the documents presented, this is the one that cannot be doctored. It’s in the Panama public registry, unlike all the other documents we have been asking for.

So the only truly official document does in fact prove that Aliator and Dubro – the companies that Caruana Galizia has linked to Michelle Muscat – did in fact own one share each of Egrant. Or rather, this fact, has not yet been disproved seven days after it was alleged.

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Remember too, that at this point, nobody has truly questioned the link between Michelle Muscat and these two companies. The premise of the defence of Muscat and Tonna is that these two companies never actually held shares in Egrant and that Egrant has always belonged to Brian Tonna.

At 8pm, we send fresh questions to Brian Tonna:

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Sixteen hours later, we are still waiting for a reply. We’ll keep you updated when we get one.

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In the meantime, let’s just rewatch this video and reach your own conclusion:

Continue reading the Egrant Exposed series: EGRANT EXPOSED PART 3: DOCUMENTS PROVE MAXIMUM SECRECY

READ NEXT: Egrant Exposed: The Comprehensive Explainer You’ve Been Waiting For

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