Not Just Michelle Muscat: What Else To Expect From Egrant Inquiry’s Big Reveal
Protest slogans outside Pilatus Bank. (Photo left: MaltaToday, Photo right: Newsbook)
After over a year of investigation, the Egrant magisterial inquiry has finally come to a close and is expected to be published imminently. The inquiry was spurred by a stunning allegation by late journalist Daphne Caruana Galizia that Prime Minister Joseph Muscat’s wife owns an offshore Panama company, which the Muscats have vehemently denounced as an utter lie.
However, while the public will be eager to get some closure to this claim, magistrate Aaron Bugeja has cast his net wider and has also investigated alleged corruption at Pilatus Bank – which is now under the hands of a financial controller after its chairman Ali Sadr Hashemi Nehad was arrested and prosecuted in the United States.
In fact, these are the inquiry’s terms of reference.
Michelle Muscat with Leyla Aliyeva
1. Whether Michelle Muscat is the ultimate beneficial owner of Egrant
2. Whether the Muscats, OPM chief of staff Keith Schembri, Tourism Minister Konrad Mizzi and former EU Commissioner John Dalli had accounts at Pilatus Bank.
3. Whether these accounts were used to conduct suspicious financial transactions or acts of corruption or money laundering involving people from Azerbaijan.
The secretive nature of offshore structures that makes them so appealing in the first place means it could have been very hard for Bugeja to definitively conclude whether Egrant had ever belonged to Michelle Muscat or not. When announcing ownership of Egrant last year, Nexia BT boss Brian Tonna published a bearer share certificate that the two Panmanian subscriber companies which had set up Egrant had assigned their two shares to.
The nature of the beast means that anyone could become owner of Egrant just by gaining possession of that physical piece of paper. While Tonna could have held it from day one, it could also have changed hands several times without a trace.
It is the other two lines of inquiry that could well prove more interesting. While the Muscats and Konrad Mizzi have denied holding accounts at Pilatus Bank, John Dalli has confirmed he used to have such an account while the existence of Schembri’s account was revealed when secret reports by the Financial Intelligence Analysis Unit (FIAU) were leaked to the press.
Dalli has been open about his account – saying he only opened it to test out the bank’s services so that he can offer sound advice on it to his clients. The former European Commissioner said the bank closed his account itself due to lack of use.
Former EU Commissioner John Dalli
It’s with the Muscats and Schembri that the story becomes more tangled.
According to Daphne Caruana Galizia, Egrant had two bank accounts – one at Pilatus Bank and another at an unnamed bank in Dubai. Leyla Aliyeva, the daughter of Azerbaijan’s ruler Ilham Aliyev, was said to have owned a Dubai company called Sahra FZCO which in turn owned an account at Pilatus Bank.
Aliyeva’s company was said to have paid biweekly $100,000 instalments into Egrant’s Dubai bank account between January and March 2016.
Leyla Aliyeva (left) with her sister Arzu
Then in March 2016, Aliyeva made a single payment transaction of $1.07 million to Egrant’s Dubai account, but this was blocked by one of Pilatus’ two US correspondent banks before eventually passing through. Both correspondent banks eventually cut ties with Pilatus Bank.
In an interview with Lovin Malta, whistleblower Maria Efimova – a former assistant of the bank’s chairman Ali Sadr Hashemi Nejad – described the commotion that had erupted at Pilatus.
“I remember it was in the afternoon and there was lots of shouting about this transaction that had been stopped by one of our corresponding banks,” she said. “Unfortunately I can’t recall the name of the bank and I wasn’t participating in the operational department procedures, but I noticed that everyone – especially the management – was very anxious. This was a particular transaction between sender and receiver and yes, the name ‘Egrant’ kept coming up during the conversation because it was the beneficiary of the transaction. I kept receiving calls from Nexia BT about this transaction and eventually [the bank’s CEO] Hamidreza Ghanbari told me to forward all calls from Nexia to him directly.”
Pilatus Bank whistleblower Maria Efimova
A few months ago, The Guardian – a member of The Daphne Project journalistic consortium – reported that the Aliyev family did indeed own Pilatus Bank accounts through a number of companies, including Sahra FZCO.
The Guardian did not delve into the Egrant story but said the Aliyevs used these bank accounts to secretly invest in properties and businesses across Europe.
As for Keith Schembri, Caruana Galizia wrote that he actually had two Pilatus Bank accounts – one held in his own name and one held in the name of his Panama company. According to the late journalist, Schembri used Pilatus to conduct “highly suspicious transactions” involving Azeri people. The claim was never expounded on, but it could be linked to a story carried later on by journalist-blogger Manuel Delia which claimed Schembri had received $430,000 in unexplained funds a few weeks after he had travelled to Baku to meet Ilham Aliyev.
Keith Schembri (centre) allegedly conducted illicit transactions with Brian Tonna (left) and Adrian Hillman (right)
FIAU reports also claimed that Schembri used his Pilatus Bank to conduct illicit transactions – including alleged kickbacks from Brian Tonna on the sale of citizenship to three Russian nationals and an alleged kickback to former Allied Group managing director Adrian Hillman as a commission on printing equipment Schembri had told to The Times of Malta.
Schembri has insisted that the first payment was actually the repayment of a debt and the second one a business transaction with Hillman in his capacity as managing director of The Times.
Although these two stories are subject to separate magisterial inquiries, the terms of reference of the Egrant inquiry means it is highly likely to delve into them.
Given that the inquiry is all about financial transactions, its information is likely to be extremely sensitive to the people involved – not all of whom are politically active. Yet these stories have not only cast a dark cloud on the protagonists involved but on Malta as a nation, so it is imperative that the inquiry is published in its entirety.
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