MFSA denies chairman's conflict of interest

The MFSA has denied claims by Labour MP Evarist Bartolo that chairman Joseph V. Bannister is the business associate of a recipient of direct contracts from the regulator, and insisted he is a non-executive director of the Kairos Fund and of four other schemes that have no association with Malta.

"Prof Bannister's involvement in international fund business is known to the Malta Financial Services Authority and to the public both in Malta and overseas. His involvement is listed in his biography which has been published in the local media when he gives presentations at conferences organised in Malta," the MFSA said in an official statement.

Bartolo said Bannister is a director of a Cayman Islands company, which he claims has gone undeclared in the Malta Financial Services Authority's annual report. MFSA chairman Prof. Joseph bannister has denied any conflict of interest.

Bartolo said Bannister has been a director of Kairos Fund Limited, an umbrella collective investment fund with a big number of funds, since 2005, as announced by an Irish Stock Exchange announcement of 15 June 2005.

Bannister was appointed jointly with Peter Astleford, a partner and co-head of the financial services group of Dechert LLP, the company of which was awarded €463,000 in direct order consultancies by MFSA.

But the regulator said that Bannister's international involvement has been "utilised by both the MFSA and various practitioners to solve complex problems in the funds sector."

The MFSA also denied any business association with Peter Astleford, whom it said had resigned from Kairos Fund in early 2007.

"Dechert LLP, considered one of the leading financial services legal firms in Europe, have had a long professional association with the MFSA, having helped the MFSA to develop and continuously refine the Professional Investor Fund [PIF] regime and the Special Funds Act which has been developed into the Retirement Pensions Act. They have recently assisted the MFSA in the discussions with the UK tax authorities on the tax transparency of the Maltese Limited Partnership," the MFSA said.

The Labour MP has accused Bannister of being in breach of good governance principles, being involved in the administration of funds in a jurisdiction that is competing with Malta in this sector, and in a jurisdiction "with dubious reputation".

Bartolo has also called on Prime Minister Lawrence Gonzi to declare whether Bannister informed his office of the directorships he holds and whether he allowed the chairman of the MFSA to hold such directorships.

"It follows that if Professor Bannister - after pompously denying claims I made in Parliament on 13 November 2012 saying that there was no truth in what I said - does not deny these statements with credible documentation, we shall produce the documentation ourselves and Professor Bannister should realise he has only one option left for him to do."