Today’s revelations by The Times of Malta and Reuters paint a clearer picture than ever of why two key Maltese decision makers set up secret companies in Panama just after getting into government. There are now at least four credible reasons to suspect that these companies were designed to receive dodgy payments related to the power station deal - payments destined for the Prime Minister’s right hand men who are still negotiating countless other deals on behalf of Malta as we speak.
So what's new and what does it tell us?
Konrad Mizzi gazing at the LNG tanker, part of the Delimara power station project
It turns out that the mysterious Dubai company 17 Black is owned by none other than Yorgen Fenech, the CEO of the powerful Tumas Group, which is one of the business partners in the Electrogas consortium running the LNG power station.
17 Black was one of two Dubai companies which were supposed to transfer monthly fees of €150,000 to the Panama companies of Tourism Minister Konrad Mizzi and OPM chief of staff Keith Schembri.
Fenech opened a bank account in Dubai for 17 Black in June 2015, two months after Enemalta signed multiple contracts binding it to buy €131.6 million worth of LNG from Electrogas yearly for ten years. At the time, Mizzi was Energy Minister, politically responsible for Enemalta.
Fenech’s ownership of 17 Black is the fourth link between Mizzi’s and Schembri’s Panama companies and the LNG power station. Leaked documents from the Financial Intelligence Analysis Unit (FIAU) had already shown how 17 Black had received €161,000 from Mario Pullicino, the local agent for the tanker supplying gas to the LNG power station, and two separate payments amounting to €1.1 million from an Azeri national. The Azerbaijan link is crucial as one of the three shareholders of Electrogas is Socar, the Azeri state-owned energy company.
This Azeri national has now been named as Rufat Baratzada, a security guard who works in Baku, but remains unknown how he had come in possession of such a large sum of money or why he had given it to Yorgen Fenech. A spokesman for Socar said the company had no links or knowledge of the man.
The fourth link involves Nexia BT, the financial advisory firm which set up the Panama companies for Mizzi and Schembri. Nexia BT managing partner Brian Tonna and three other Nexia employees had sat on the Enemalta committee which selected Electrogas to run the power station.
Who is Yorgen Fenech?
Fenech is CEO of the Tumas Group, a powerful business group which owns Portomaso and the Hilton Hotel in St Julian’s, as well as the Dolmen Hotel in St Paul’s Bay. In recent years, Tumas teamed up with the Gasan Group for two major projects - a high-rise development in Mrieħel, that was approved by the Planning Authority, and the LNG power station in Delimara. For this latter project, Tumas and Gasan, along with pharmaceutical importer Paul Apap Bologna, formed GEM Holdings, which is an equal shareholder in the Electrogas consortium, along with Azerbaijan’s state-owned energy company Socar and German manufacturing giant Siemens.
Talks are also ongoing for Tumas to purchase the majority of shares from Midi plc for a project to develop high-end residences on Manoel Island.
What is 17 Black?
The existence of 17 Black was revealed by now-assassinated journalist Daphne Caruana Galizia in a cryptic blogpost back in February 2017. The blog merely read “17 Black - the name of a company incorporated in Dubai” and included the faces of Schembri, Mizzi, Prime Minister Joseph Muscat and former EU commissioner John Dalli.
A week before the general election, the Malta Independent published transcripts from a document by the FIAU which said that 17 Black and another Dubai company called Macbridge were set up with the express intention of transferring kickbacks to Mizzi’s and Schembri’s Panama companies.
The Malta Independent quoted excerpts from the FIAU report including how Nexia BT partner Karl Cini had described the two Dubai companies as the “target clients” of Mizzi’s and Schembri’s Panama companies.
Then, in April this year, the Daphne Project released more details from FIAU investigations into 17 Black, including how its bank account at the Noor Bank in Dubai had received three payments - one single payment of €161,000 from a certain Mario Pullicino, the local agent for the tanker supplying gas to the LNG power station, and two separate payments amounting to €1.1 million from an unnamed Azeri national.
The Daphne Project also published an email that Karl Cini had sent Mossack Fonseca, requesting the Panamanian law firm to open bank accounts for Mizzi’s and Schembri’s companies with the Witherbotham bank in the Bahamas.
Cini said that the companies would be operating in the maritime and fisheries sector in Bangladesh, tourism in Asia, infrastructure projects in African countries and Indian, as well as recycling and remote gaming.
He also stated that Schembri's and Mizzi's main target clients will be Dubai companies called 17 Black and Macbridge and that these two companies will transfer €150,000 a month to Mizzi's and Schembri's companies.
However, these transactions never took place. FIAU investigations found that attempts by Nexia BT to open bank accounts for the two companies halted abruptly in February 2016, right after Daphne Caruana Galizia first started writing about the Panama Papers.
After the leak, Konrad Mizzi and Keith Schembri contradicted each other’s versions of events in a big way. Schembri said that 17 Black and Macbridge had been included in draft business plans for his Kasco business group as potential clients but that neither he nor any of his companies had ever conducted any transactions with either of them. Meanwhile, Mizzi insisted he had no connection with 17 Black and reiterated his company was solely intended as a family trust. Despite this, he has not sued Nexia BT for misrepresentation for having included his company alongside Schembri’s in its email to Mossack Fonseca.
Prime Minister Joseph Muscat refused to comment or even state whether he had asked Schembri who owns 17 Black, arguing that any statement of his could prejudice ongoing magisterial inquiries into the Panama Papers and alleged kickbacks.
How has the situation now changed?
We now know that 17 Black was owned by Yorgen Fenech, that its Noor Bank account went dormant after 2015 and was frozen last September as part of an investigation by the UAE law enforcement authorities.
We also know that 17 Black changed its name to Wings Development back in March 2017, a month after Daphne Caruana Galizia had uploaded her original cryptic blogpost.
The Azeri national which transferred €1.1 million to 17 Black has also been named as Rufat Baratzada, a security guard who works in Baku. It remains unknown how a mere security guard had come in possession of such a large sum of money or why he had given it to Yorgen Fenech, but a spokesman for Socar said the company had no links or knowledge of the man.
Meanwhile, Mario Pullicino, the local agent for the LNG tanker, told the FIAU his €161,000 payment to Fenech was for the provision of “manpower” but didn’t expand further.
The Economic Crimes Unit of the Maltese police force received the FIAU report for a money-laundering investigation seven months ago and have requested the assistance of their counterparts in the UAE.
Joseph Muscat has refused to comment on 17 Black so far
What questions remain unanswered?
-Why did Yorgen Fenech plan to transfer huge monthly fees to Mizzi and Schembri? Did he get anything in return?
-Were the other Electrogas partners aware that Fenech had such an intimate relationship with the men responsible for granting them with the power station contract?
-Was Nexia BT aware that Fenech owned 17 Black when it sent that email to Mossack Fonseca?
-How did a mere Azeri security guard come in possession of €1.1 million and why did he transfer it to Yorgen Fenech? Is there any connection between him and Socar?
-Did 17 Black receive any other payments besides from Mario Pullicino and the security guard?
-What about Macbridge? Who owns it and did it receive any payments from anyone?
-If Mizzi really did set up his Panama company as a family trust, why has he not sued Nexia BT for stating he had set it up for business purposes?
-Was Joseph Muscat aware of this behind-the-scenes transaction and will he now take any action against Mizzi and Schembri?