Updated | Schembri asks for publication of Allied inquiry after Hillman settlement

Allied Newspapers has reached an agreement with its former managing director Adrian Hillman, who had resigned his post weeks after the newspaper group launched an internal inquiry over alleged editorial interference.

Allied, the publishers of The Times, had announced they were holding the inquiry in March 2016 on account of information that Hillman was the owner of a British Virgin Islands company and could have received bribes from Keith Schembri – who in 2013 managed Labour’s election campaign and later became the Prime Minister’s chief of staff.

Allied reached a private agreement with Hillman concerning “any claims they have or may have had against each other. As a result, all litigation is being withdrawn.”

On his part, Hillman thanked the company “for the opportunity given to [me] to serve as managing director, satisfied that the matter has come to a positive close.”

The inquiry, headed by judge emeritus Giovanni Bonello, was not published.

Keith Schembri issued a statement in reaction to the news, saying that the result proved that there was no wrongdoing from his business group as had been alleged.

“The dishonest and highly politicised campaign against me personally has been proved to be baseless. Now that this matter has been resolved, for the sake of transparency, I urge Allied Newspapers to publish its independent inquiry.”

The inquiry stemmed from information and accusations by the Malta Independent columnist Daphne Caruana Galizia, who had early information on the Panama Papers before it was published by the International Consortium for Investigative Journalists.

The information, resulting from the Mossack Fonseca leak, was that Hillman, Schembri and developer Pierre Sladden, had a joint undertaking in offshore companies they opened in 2012.

At the time of the allegations, Allied’s director Louis A. Farrugia took the step to launch an internal inquiry because of suggestions that Hillman’s relationship with Schembri – whose company Kasco supplied newsprint to Allied – had also influenced the newspaper’s agenda in the run-up to the 2013 election. The Times’ editors denied the accusation.

Hillman had claimed unfair dismissal from Allied in the course of the inquiry. In response, Allied filed a judicial letter calling on Hillman to refund monies they claimed had been spent without authorization. Hillman denied the claim, saying the alleged transactions had been regularly registered and approved by the auditors and the board.

As the Panama Papers scandal unfolded, documentation in the leak showed that the BVI companies individually owned by Keith Schembri, Pierre Sladden and Adrian Hillman were equal shareholders in a Cypriot company, A2Z Consulta.

The information in Caruana Galizia’s hands, later published by the Australian Financial Review, led to accusations she made that Schembri had bribed Hillman to curry support for Labour with The Times.

Both Schembri and Sladden were involved in some part of the €30 million construction of Allied’s printing press Progress in 2011: Schembri provided printing machinery, while Sladden had been a sub-contractor on part of the construction works.

Sladden’s involvement in A2Z Consulta was revealed in the Australian Financial Review, which said the Cypriot company passed on a €900,000 constitution of debt to his BVI company Blue Sea Portfolio. Sladden denied that the payment ever materialised.