MFSA chairman denies knowledge of HSBC bank account for Kairos

The chairman of the Malta Financial Services Authority, Prof. Joseph Bannister, has denied any knowledge of an HSBC bank account held in Geneva for Kairos Investment Management, reportedly holding €600 million in cash.

Bannister is a director of Kairos Fund, a related company to Kairos Investment Management, which he says closed “some time ago”.

“The Kairos Fund was constituted separately from Kairos Investment Management and in line with international market practices utilised the services of prime brokers to handle clients’ money. Subscriptions and redemptions were handled by the fund administrators. Both the prime broker and the fund administrator normally hold accounts in various banks,” Bannister told MaltaToday.

“As Kairos Fund director, I had no knowledge of HSBC Bank account and I had no directorships with Kairos Investment Management.”

It was already made public that Bannister had been a non-executive director of Kairos Fund, when the MFSA chairman had to deny claims of favouring a co-director’s company for consultancies worth €463,000 with the MFSA.

Bannister was director the umbrella collective investment fund since 2005, together with Ray Bugeja.

Bugeja’s name appeared in a clients’ list of HSBC Privée Geneva leaked to the International Consortium of Investigative Journalist, in connection with a number of hedge funds domiciled in the Bahamans and the Cayman Islands. It reports that Bugeja oversaw both hedge funds during his time as director and chief financial officer of investment management company Kairos.

Bugeja was a co-founder of Kairos and served as its director until April 2010. He was the Chief Financial Officer and Chief Operating Officer at Kairos Investment Management Limited and Chief Financial Officer at Kairos Partners Italia Srl.

He has denied any further links with the company ever since returning to Malta in 2010 and said he never held a Swiss bank account.

Kairos was set up in 1999 in Milan, where Bugeja obtained his Italian citizenship.

“Many hedge fund companies in the UK, regulated by the FCA, have funds in the Cayman Islands. Italy, Luxembourg and Lugano. There is nothing wrong with that. That is how hedge funds operate,” Bugeja was quoted as saying.

“I am in Malta, paying the taxes I am due to pay in Malta. I have never had to call on any amnesty, and I have never had a need to. I have nothing to hide.”

Bugeja, also a candidate for the 2013 EP elections, headed a commission that reviewed the Nationalist Party’s finances and commercial entities.

Nationalist Party leader Simon Busuttil has confirmed that his party will speak with former PN leadership contender Ray Bugeja over reports linking him with a €600 million account listed in the Swiss leaks files.

“The PN will speak to Ray Bugeja to find out whether there’s anything more to the issue than what the Malta Independent reported,” Busuttil told MaltaToday.

“However, he wasn’t a politician ten years ago. The amount of money in question was linked to him in that he was the leader of a financial company whose job is to manage people’s money. One cannot compare Bugeja’s case with that of former ministers Ninu Zammit and Michael Falzon, and I see no reason why the party should suspend him.”