Accountancy board slammed by judges over lack of action against Nexia BT

Judges grew increasingly frustrated with Accountancy Board Chairman Peter Baldacchino’s replies attempting to justify the lack of action taken following the Panama Papers exposé in 2016 as well as revelations on 17 Black.

Baldacchino told the public inquiry into Daphne Caruana Galizia’s assassination that the Accountancy Board did not suspend the warrants of Brian Tonna, Karl Cini and Nexia BT because they were advised by former Attorney General Peter Grech not to act until judicial proceedings were over.

“Why do we have an Accountancy Board then? The Board also has its own powers,” Judge Abigail Lofaro told Baldacchino.

Nexia BT, which set up offshore structures embroiled in corruption allegations, faced directives from the MFSA, the Accountancy Board and the Malta Individual Investor Programme Agency, only last week following a court order to freeze their assets.

Baldacchino said that if the Board had information it would be passed on to the FIAU or the police.

He said that removal of warrants had been discussed, but nothing could be done “until there is reasonable suspicion”.

“There was reasonable suspicion from the very beginning,” noted Judge Michael Mallia who heads the Board.

Baldacchino said that in order to suspend the warrants, they had to be in possession of “harder evidence” from investigators.

“Did you run after the police (for the evidence)?” asked Lofaro, to which Baldacchino replied, “yes”.

“It took four years,” Lofaro retorted.

Accountancy Board secretary Martin Spiteri confirmed what Baldacchino said. He also confirmed that, in 2017, the Accountancy Board had also sought the Attorney General’s advice on how best to change the law in the public interest and was told, “it is dangerous to change the law”.

The witnesses were asked to present to the board Quality Assurance reports on Nexia BT, as well as correspondence between the Attorney General, FIAU, and MFSA.

Call logs between Schembri and Fenech show close relationship

Notes taken by assassinated journalist Daphne Caruana Galizia show call logs in the period prior to the 2017 snap election between former Chief of Staff Keith Schembri and murder suspect Yorgen Fenech.

The notes were presented to the Board by the slain journalist’s son, Pulitzer Prize-winning journalist Matthew Caruana Galizia, who retrieved the information from notebooks that his mother had kept from meetings with sources – some of which he too had attended.

The metadata of the numerous calls, which the two had looked into together, showed calls between Fenech and Schembri, Caruana Galizia told the Board, adding that he had not known Fenech’s number until now.

“My mother had identified this number as being Yorgen Fenech’s,” he added. Caruana Galizia highlighted the timing to the board – the phone logs refer to the period just prior to the general election and during the time when reports about Pilatus Bank were emerging.

“They show the relationship between the two,” noted Judge Emeritus Joseph Said Pullicino.

Caruana Galizia also revealed how former PN Minister Tonio Fench had been “recommended by Keith Schembri” and approached by Pilatus Bank to be on the board of directors.

“It was basically a case of ‘involve this person because then it would be difficult for the opposition to scrutinise’,” Caruana Galizia said.

Another set of notes taken by Caruana Galizia also depict a cosy relationship between former Prime Minister Joseph Muscat, Schembri, Identity Malta’s Jonathan Cardona, Education Minister (former Justice Minister) Owen Bonnici and Henley and Partner chairman Christian Kalin.

The notes were taken as Caruana Galizia was shown emails between the five discussing legal action against her, shown to the journalist by a source.

The notes show the government officials egging on the action, and a consensual Bonnici who does not say much throughout.

Kalin allegedly spoke about having to take action in the UK in order to “increase the pressure”. He said that UK potential clients would be needed who “can demonstrate that negative press stopped them from doing business with us”.

“We have no such examples of this in the UK office, I’m afraid,” was the reply.

According to the notes, the firm’s UK office also informed Kalin that they do not believe a convincing argument could be created.

Kalin allegedly replied that they want to send a message that “if they don’t stop this nonsense it will get very expensive for them. Of course, we have no intention to go to court over this”.