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Egrant magisterial inquiry: the 1,500-page document in full
Read the 1,500-page magisterial inquiry findings into the alleged ownership of the secret offshore company Egrant here
17 December 2019, 4:58pm
Matthew Vella
Matthew Vella
2 min read
Nationalist Party leader Adrian Delia has published the entire magisterial inquiry into the secret Panamanian company Egrant.
The magisterial inquiry had determined there was no conclusive proof that the company was owned by the spouse of Prime Minister Joseph Muscat, as alleged by the late journalist Daphne Caruana Galizia.
Speaking in a live broadcast a day after having received a copy of the 1,500-page inquest report from the Egrant magisterial inquiry, Delia said he would be publishing the report in its entirety.
“The Egrant report shows that the authorities had to take steps. Instead they shirked their duties and did not take steps according to law, this means Muscat and Bonnici have been for the past 18 months knew there were investigations to be done, and did not do anything, with the consequence that important evidence could have been hidden,” Delia said.
The inquiry’s conclusions was published in 2018 but despite the prime minister’s insistence that the report should be published in full, the Attorney General withheld publication. Delia subsequently petitioned the courts to have the report released to him, which case he finally won through the decision of an Appeals Court.
The Egrant report indicates that Karl Cini could have lied under oath, with the inquiring magistrate saying the Nexia BT partner should be investigated by the police.
The matter revolves around sworn testimony Cini gave regarding the setting up of offshore companies, which did not tally with the findings of a forensic accounting firm.
Cini had been called to give testimony before the inquiry, led by then Magistrate Aaron Bugeja, on 5 May 2007.
Under oath, he had said that he had set up three companies in Panama.
An investigation by Forensic Accountants Harbinson Forensics, who were hired for the purposes of the inquiry, found however that Cini had set up a fourth company in Panama, Real Trade Investments Global Corp.
In his testimony, Cini had said that Real Trade Investments had been set up in the British Virgin Islands, which the forensic firm found out was untrue. In his testimony, Cini claimed he had set up four companies in the BVI: Comerco, Durellie, Real Trade Investments and Willerby.
The forensic firm’s investigation found that Real Trade Investments was set up in Panama, not the BVI.
Moreover, the firm found that Cini had also set up another seven companies in the BVI which he failed to mention: Colson, Selson, SPX, Blue Sea, Torbridge and Berdil.
In light of this, the inquiring magistrate said the Police Commissioner should investigate the discrepancy in Cini’s testimony since the documentary evidence shows prima facie that he might have lied under oath.
Matthew Vella, a freelance journalist at MaltaToday, was formerly executive editor at Malt...
Did Pilatus Bank really wire thousands in cash to owner Ali Sadr’s sister in London, to pass on to Michelle Muscat’s friend in New York?
The answer, the Egrant magisterial inquiry report confirms, is no. And Magistrate Aaron Bugeja went as far as calling on the police to investigate Jonathan Ferris’s claims that a $1 million transaction included money wired secretly to a friend of Michelle Muscat in New York.
This was one of several stories that Daphne Caruana Galizia published in the aftermath of her claim – since disproven by the magisterial inquiry – that Michelle Muscat was wired over $1 million in Dubai by the Aliyevs of Azerbaijan, from their bank account in the now shuttered Pilatus Bank.
“This is a load of crap,” Michelle Muscat told the inquiring magistrate in her testimony, as she read out the WhatsApp messages she had sent to Michelle Buttigieg, a Maltese migrant in New York who served as envoy for the Malta Tourism Authority in the United States.
Daphne Caruana Galizia had claimed that Pilatus Bank had wired $400,000 to Ali Sadr’s sister Negarin, a fashion designer, to be paid directly to Buttigieg in the form of a loan.
“This is such a fictitious story, people read it and found it hilarious, it is hilarious, this is hilarious, it is all a fabrication,” Muscat told the magistrate in her testimony in the Egrant inquiry.
Muscat had met Buttigieg back in her days as an assistant to former Labour leader Alfred Sant, when she coordinated a visit in New York to Maltese migrants there. Buttigieg’s husband William was part of the committee who helped organise the visit. After striking up a friendship, Muscat started marketing Buttigieg’s jewellery in Malta, under the brand name Buttardi.
But the claim of the $400,000 loan was further reinforced by the sacked FIAU officer Jonathan Ferris, a Caruana Galizia source. Ferris told the magistrate that an FIAU compliance report on Pilatus had found a $1 million transfer from Leyla Aliyeva, $600,000 of which were passed on as a loan to Buttardi in New York.
But Ferris told Magistrate Aaron Bugeja he had not seen the report itself. “I didn’t see it. I saw a compliance report because I worked in compliance. But this came out when the MFSA and FIAU carried out their visit and found loads of breaches.”
Yet Bugeja asked forensic accountant Miroslava Milenovic to investigate Ferris’s claims, who found no such transactions or loans.
“The Commissioner of police should investigate Ferris’s allegation, and he should be given the right to explain how he came to this conclusion relative to the $1 million transfer, as has resulted from direct and documented proof that there is prima facie perjury on his part.”
‘Election Grant’
Ferris even told the magistrate that none other than former EU commissioner John Dalli had claimed with him that ‘Egrant’ stood for ‘Election Grant’: the story, as told by Ferris to Bugeja, was that before leaving the police corps, he had informed Dalli that an investigation into his role on a Ponzi scheme would be assigned to a superintendent. “Dalli took me aside and said: ‘look here, and I am telling you this because I have never met someone like you in the corps – if you want to make some noise, if you want to know whose company Egrant is… Egrant is ‘Election Grants’. It is Labour’s company.”
The fascinating aspect of the allegation is how it resonates with statements first made by Simon Busuttil back in September 2016. Answering questions during an interview at an Independence rally on 17 September, Busuttil mooted the suggestion that Egrant stood for ‘election grant’, connected to Labour’s own financing efforts.
Dalli later denied this claim when asked by the magistrate.
Ferris told the magistrate he pocketed the information, but later on in his testimony, he dwells on Dalli’s interests in Dubai. “What interest did Dalli have to mislead me when he did not even know that I would eventually have to deal with this document?” he told Bugeja.
But the magistrate counters: “But information on this damn company leading to the Muscats, Dalli did not…”
“I have nothing but in the FIAU compliance report on Pilatus there is an issue of interest,” Ferris says, now referring to a $1 million transfer from Leyla Aliyeva, of which $600,000 had been paid to Michelle Muscat’s friend in New York “in the name of Buttardi”.
“The source of that cash was Aliyeva and it passed quickly, in and out. They were not deposited but an outward transfer took place. They came in, and they shot back out.”
Magistrate Bugeja then says that none of the people he inquired about this allegation – former FIAU director Manfred Galdes and FIAU officers Sarah Scerrik Martina Scalpello, Alfred Zammit, Ruth Gauci, and present director Kenneth Farrugia – confirmed Ferris’s claims.
German authorities refused to pass on Daphne Caruana Galizia’s laptops that were in their possession to Maltese magistrates, according to the Egrant inquiry report.
The revelation emerges from a lengthy email exchange that took place in the weeks leading up to June 2018 between Magistrate Aaron Bugeja and the German prosecutor’s office.
Bugeja headed the Egrant inquiry but was also communicating on behalf of other Maltese magistrates conducting other inquiries, including then magistrate Anthony Vella, who was leading the inquiry into the murder of Caruana Galizia.
It was in April 2018 that the Daphne Project, a consortium of international journalists, revealed how Caruana Galizia’s work laptops had been deposited in Germany with the federal police that month.
READ ALSO:
Daphne’s sister admits family kept her laptop
Daphne Caruana Galizia’s laptops and hard drives handed over to German police
Until then, the only laptop presented in the Maltese courts during the compilation of evidence against three men accused of murdering the journalist, was an old one that contained outdated information.
It now transpires that after news of the laptops in German hands emerged, Magistrate Bugeja sought to gain access to information held on the devices that could have been relevant to the Egrant inquiry.
However, he also informed the German prosecutor’s office that the laptops would be required as evidence in the murder inquiry conducted by another magistrate. Bugeja said that Maltese law required the evidence to be original and hence requested a transfer of the laptops and hard drives.
Bugeja said this was not a mere formality but a legal requirement.
However, in an email received in June 2018, Bugeja was informed by the German authorities that they were legally barred from transferring the laptops because the devices were not subject to a German investigation.
“The laptops are situated at the Federal Criminal Police Office Wiesbaden on the basis of a voluntary transfer and are not subject of a German Investigation procedure. The local prosecution has no legal basis for a seizure of these laptops as evidence, therefore the local authority cannot freely dispose of them, as there are still rights of the owners of the laptops,” the German prosecutor wrote.
She insisted that the German authorities had “no authority” over the laptops. “It is for this reason that no transfer of laptops or hard drives is considered.”
READ ALSO: Just seven days after Daphne Caruana Galizia’s murder police asked magistrate to take possession of her laptop
German prosecutors were only willing to provide copies of particular information contained on the laptops on the basis of a mutual assistance request. However, copies extracted by the German counterparts, rather than the use of the original devices could have fallen foul of Maltese law.
The last email referred to in the Egrant inquiry report is one dated July 2018, in which Bugeja informed the German prosecutor that the matter will be pursued further by Magistrate Neville Camilleri, who had by then been appointed as the inquiring magistrate in the Caruana Galizia murder case.
It remains unclear whether after this date the German authorities changed their position and whether the Maltese side continued insisting that the devices be handed over.
MORE FROM THE EGRANT REPORT:
Egrant magisterial inquiry: the 1,500-page document in full
Azerbaijan ruler Ilham Aliyev’s daughters transferred €15 million to Dubai co from Pilatus accounts
Offshore entity for China-Malta investment, involving 'Sai', brought to light by Egrant inquiry
Multi-millionaire property tycoon Nick Candy and his wife Holly Vallance were clients of Pilatus Bank, and handled by Maltese accountancy firm Nexia BT.
The full 1,500-page magisterial inquiry into the Egrant allegations, which had disproved allegations of the ownership of the secret Panama companies by the late Daphne Caruana Galizia, has revealed a list of Russian and Azerbaijani clients at the now-shuttered, boutique bank.
These include clients like Robert Baker, a director of various Heydarov-owned companies, the Aliyev-owned Shams Al Sahra company, but also NC Yacht (Malta) Limited, a company owned by Vallance and her husband’s London firm Eleven Eleven Holdings.
Vallance, real name Holly Rachel Vukadinovic, is listed as a 0.08% shareholder in NC Yacht, whose majority (99%) shareholder is Eleven Eleven. Nexia’s BTI Management subsidiary is the director of the company.
Vallance’s address was registered at the luxury £160 million penthouse at 1, Hyde Park, Knightsbridge, which became Britain’s most expensive home — complete with heated marble floors, a 21-metre pool, a cinema and even a library.
Her husband, property tycoon Nick Candy, is billed as the go-to developer to the world’s super-rich.
Candy had lived at the house with his wife the singer and actress Holly Valance, before moving a few streets away to the luxury Providence House in Chelsea.
The property was remortgaged and passed into the hands of Candy’s companies PHB London Holdings.
One Hyde Park was designed by Richard Rogers at Rogers, Stirk, Harbour and Partners. It opened in 2011 with flats and is made up of 86 apartments commanding a record-breaking price of up to £7,000 per square foot. The interior was designed by Candy & Candy — the firm set up by Nick and his brother Christian.
Transactions at Pilatus Bank involving the daughters of Azerbaijan ruler Ilham Aliyev and the sons of his minister for emergency situations Kamaleddin Heydarov, show “commonly accepted red flags for money laundering”, a forensic review included in the Egrant magisterial inquiry concludes.
On the basis of this suspicion that the now-shuttered bank was used for money laundering, the report calls for “international cooperation” to address this problem.
The report even lists the countries which should be rolled in this investigation namely; the United Arab Emirates, New Zealand, the United States, the United Kingdom, Germany, China and Turkey.
This international cooperation is also deemed essential to determine whether Politically Exposed Persons (PEPs) from Malta are involved in “acts of corruption, money laundering or suspicious transactions” with PEPs from Azerbaijan.
READ MORE • Heydarov business director Robert Baker set up numerous Malta companies at Pilatus Banks
The report acknowledges that no transactions had passed through the bank accounts of Maltese PEPs (politically-exposed people) at Pilatus Bank.
But “there was not enough evidence that transactions did not pass through hub accounts abroad.”
The report identifies a number of suspicious transactions from companies owned by the Aliyev daughters and the Heydarovs to a Dubai-based company called Palma Management Consulting. The company is described as a “payment hub which should be checked with the UAE’s Financial Intelligence Unit.”
Palma Management Consulting is also mentioned as a correspondence address for Sahra FZCO in its Pilatus bank account.
The report identifies 117 payments made to Palma Management Consultancy by nine different companies, including Sahra FZCO, whose directors are Aliyev’s daughters Leyla and Arzu. The Aliyevas are also involved in seven other companies, three established in UAE, two in Azerbaijan and one in the British Virgin Islands (Roundtree Ventures).
One of these companies, Raphael Investment Limited, had received a $73 million loan from Pilatus Bank to buy a property in Moscow which possesses land. Money transfers passed through several layers, all with accounts in Pilatus Bank, starting from Raphael Investments, passing through several non-resident accounts in Pilatus Bank, and finally ending in the Cyprus bank account of Edinklar Developments Limited.
The sisters transferred €14.9 million from their Pilatus Bank account for Sahra FZCO, to Palma Management Consultancy in three separate transactions between September 2015 and March 2016.
Sahra FZCO is a UAE-based holding company set up to hold the real estate assets of its beneficial owners, with the Sofitel Dubai Palm Resort and Spa and Yassat Gloria Hotel Apartments listed as the source of the company’s wealth.
The details emerge from a magisterial inquiry launched into allegations by journalist Daphne Caruana Galizia, who claimed a $1 million transaction from a Pilatus account held by ‘Al Sahra FZCO’ belonging to Leyla Aliyeva, was made to Egrant Inc in the name of the prime minister’s spouse. The allegations were disproved by the inquiry.
Egrant’s mystery stemmed from the fact that it was seemingly set up together with two other offshore companies owned by the prime minister’s former chief of staff Keith Schembri and former energy minister Konrad Mizzi.
But the magisterial inquiry found no evidence of Aliyeva cash going to Egrant, which had no bank account at Pilatus, and could not be traced to Muscat.
1. We have found nothing in the digital data to suggest that Mrs Muscat, either personally or through companies she may own, had anything to do with Egrant. 2. We have not seen any documents revealing that the UBO of Egrant was anyone other than Brian Tonna. 3. There is also nothing to suggest that there was ever a bank account opened in the name of Egrant. “We have not found any digital versions of the Declarations of Trust you have been given which allegedly show that shares in Egrant Inc are held by Mossack Fonseca nominees for ‘Mrs Michelle Muscat’. We understand that these were allegedly provided to Pilatus by Brian Torma when it is alleged he opened a bank account for Egrant Inc. Their absence from the data sets of Nexia BT, Pilatus Bank and the Panama Papers would suggest that the Declarations of Trust you have been given were not created in either Pilatus or NexiaBT or by Mossack Fonseca. “As noted above, we have not found any digital versions of the Declarations of Trust you have been given nor we have seen any other documentation that links Michelle Muscat to Egrant Inc either through Mossack Fonseca nominees or in any other way. “We have found no documents which suggest that any declarations of trust in relation to any entity containing the word Egrant were provided to Pilatus by Brian Tonna or anyone else. “The data seized does not contain any trace, either in files or in snippets of files remaining in the ‘unallocated clusters’ data, of these files being scanned or uploaded to the internet. Our searches therefore have not found any digital records to suggest that such documents were ever in the bank’s possession or uploaded."
Elvin Grant
Elvin Grant had the email [email protected]. Richard E. Grant Norfield had his name shortened in email communications to Richard Grant, which is linguistically close to the actor ‘Richard E. Grant’… he happened to be exchanging emails with Karl Cini, Nexia staff and Mossack Fonseca during the same period in March 2013 that the enquiries regarding Egrant, Hearnville and Tillgate were being set-up. On 28 February 2013 Richard Grant was looking for a bank in Panama or Cyprus. The emails confirm that Karl Cini was in Panama in early February 2013. We note that this was just before Muscat’s election and the commencement of efforts by Nexia BT to acquire the three Panama companies – Egrant, Tillgate and Hearnville There are share transfers on 30 April 2013 from Richard Grant’s company Datamax, in Panama, to Ikonic Ltd. On 3 July, 2013, just before the incorporation of Egrant, there is a reference to Richard Grant and the incorporation of a company called Ikonic in Malta. On 5 July 2013, there is a draft letter of integrity for Richard Grant from Karl Cini to Triad Company Services. Harbinson said, “We have not found any links of Richard Grant to Egrant. However, it appears that his relationship with Cini broke down for some reason. On 7 August 2015 a further reference letter is requested for Richard Grant to set up a gaming licence in Curaaco. Brian Tonna is the author of the draft letter. Referring to this second reference Karl Cini states he now knows what kind of guy Richard Grant is and the request is refused. There are further complaints about Richard Grant on 22 August 2015.”
Searches of the ‘unallocated clusters’ Nexia devices found only one Egrant related item not found elsewhere. This was a small system file which indicated that an external memory device (possibly a USB) had been attached to a laptop and contained a subfolder called Egrant. There is no further evidence to show what this folder contained or to identify the memory device. It does raise the possibility that there were digital files in relation to Egrant which were not held on or copied onto the digital devices seized. Its present whereabouts is unknown.
Egrant was finally dissolved in 7 April 2017. “The process by which Nexia BT worked to get Egrant dissolved does not appear to us to shed any further light on who, other than Brian Tonna, may have had any involvement with Egrant.” Cini had already asked MossFon to wind up Egrant back on 15 March 2016, signed by Brian Torma. On 28 October 2016 Mossfon emailed Karl Cini confirming his instructions regarding ‘Company Inactivation for Egrant’ and estimate that this should take just 4 days. No further emails or documents on this subject exist until 18 January 2017; “it is not clear why there is this long gap although it may be that MossFon took no action as there were outstanding fees due to them.” On 18 January 2017 Cini emails Tonna about letters sent to MossFon back in March 2016 asking for Egrant to be wound down and in April 2016 to revoke a Power Of Attorney to BTI Management for Hearnville & Tillgate. He claims neither were acted on. On 20 January, MossFon send a fee quote “re-activate” Egrant but also an invoice for its dissolution. There are similar documents on the same day for Tillgate and Heamville. “It is interesting that they decided to dissolve all three companies together and not just Egrant.” The dissolution of Egrant was finally confirmed on 7 April 2017. Of note is an attempt starting on 30 January 2017 to create documents which would purport to come from MossFon to demonstrate who the officers and UBO of Egrant were and the type of shares it issued. Cini says he provided the text of what he wanted MossFon to confirm. “This however, seems at odds with the testimony of Tonna in which he appears to deny that the letter was prepared by his office and simply sent to MossFon for signature.” MossFon’s Ricardo Samaniego of MossFon signed the document Cini sent him on 24 February 2017. “It is a matter for you to decide whether there has been any wrongdoing in this and whether the fact that Nexia BT felt the need to create documents in this way has any significance for your inquiry,” Harbinson told the magistrate. The magistrate says that from letters rogatory, Samaniego was unaware of who Egrants’ UBO was, except for Tonna. He said he signed a letter passed from MF because he was Egrant’s registered director. MF had no objections to the letter. “It is evident that… Tonna evidently did not know what Cini was doing or communicating with MF in this regard.” The magistrate notes that Cini on 23 April 2017 – in the thick of the election – wanted an official statement from Mossack Fonseca’s Jaqueline Alexander in the name of subscriber companies Dubro and Aliator, of never having signed any declarations of trust in the name of Michelle Muscat, on company letterheads. “Although Cini looks like he is pressing her for information and declarations, he is not telling them to provide these without verification,” the magistrate points out. “He must have known these declarations of trust never happened and he was so confident of this that his request almost assumes the air of a ‘challenge’ to MF… what is sure that Cini did not want MF to declare anything that was not reflected in their own records.” Cini was also asking ATC Administrators (who held the shares to Egrant for Tonna) for a copy of the share register on 23 April 2017 of Egrant at the time of its dissolution. The Egrant inquiry had just been launched and Malta was in election mode, with a bitter campaign driven by the Egrant allegations which Joseph Muscat was confidently rebutting and challenging. Cini indicated the text he wanted: “Jaqueline Alexander on behalf of Dubro Limited S.A. and Aliator S.A. confirming. after doing your own internal checks, that no declaration of trust has been issued and/or signed by her dated 20 August 2015 on behalf of the mentioned entities Dubro Limited S.A. and Aliator SA. saying that these entities hold a share each in the Panamanian corporation Egrant Inc (now dissolved) on behalf of Ms Michelle Muscat. Two declarations should be issued, one for each entity under the letterhead of each entity.” : The magistrate says MF proposed their own text: “I, Jaqueline Alexander, acting on behalf of Du bro Limited Inc., Subscriber of the Articles of Incorporation of Egrant Inc. a company duly incorporated by means of Public Deed 17935 of 4th July 2013 issued by the 5th Notary Public and filed at Page 807956 as of 8th July 2013, do hereby confirm the following:
According to the Article Seventh of the Articles of Incorporation each of the subscribers of the Articles of Incorporation agree to take one (1) share.
Through the Assignment of Subscription of Two Shares, all the rights, title and interest on my subscription, of one (1) share, were assigned and trasfer to TIIE BEARER on 8th July, 2013. In the records of the company there are no additional documents referring to the transfer or assignment of these shares.
That the company EGRANT INC has been dissolved through a Shareholders Resolution dated 19th January 2017, duly filed at the Panamanian Public Registry at Page 807956 as of 6th April, 2017.
Yours Sincerely, Jaqueline Alexander, Acting on behalf of Dubro Limited Inc. The magistrate says that this text shows MF made their own verifications and did not rubber-stamp Cini’s version. “More than that, what is written here is corroborated by other evidence collected by this inquiry… it agrees with the interpretation of the state of subscribers as explained by lawyer Fernando Berguido.” The magistrate said that it was proven that Jaqueline Alexander was the subscriber to Dubro’s share in Egrant, while Verna de Nelson was the subscriber to Aliator’s share in Egrant. “Alexander was not the director of Aliator… this is one of principal anomalies in the copies of the declarations of trust published by Caruana Galizia and passed on to the inquiry by Pierre Portelli. It was not possible for her to make a declaration of trust in the name of Aliator because she was not its representative… “Who falsified the declarations of trust had to only include Alexander for Dubro in one declaration, and not for Aliator whose sole subscriber was Verna de Nelson! This shows a lack of attention to details and facts that appear in official documents.” Additionally in July 2013, Dubro and Aliator’s shares were transferred to a bearer share, with the original transfer document signed by both Alexander and De Nelson found in Tonna’s possession. To the magistrate this proved that there were no other documents than those as held by Mossack Fonseca on the transfer and dissolution of Egrant… “Alexander was not ready to make declarations that could not be verified with files at Mossack Fonseca… this is corroborated by Alexander’s own testimony, who completely excluded that she had written up the alleged declarations of trust, and that she did not recognise their content, and that it was not her signature. This is confirmed by forensic expert Elisabeth Briggs who said the signature on the trust declarations did not match that of Alexander… “One can hypothesise that Alexander did not do as Cini requested because she was not ready to commit herself to an allegation she did not know was true or not… what can be proven is Alexander’s confirmation under oath that she was totally extraneous to those declarations of trust… “Even legally, Alexander and De Nelson as subscribers could not themselves make those declarations of trust,” the magistrate said. But in his emails of that time, Cini appeared annoyed that MF could not confirm that they had not signed those declarations of trust. He insisted on having the share register provided with company stamps and signatures. MF told Cini that directors were not obliged to stamp these documents, and that she could only have a notary sign it on the present date. Cini insisted on having a copy of the share register as at 19 January 2017, even if it carried the present date – he wanted the share register certified. On 2 June 2017, Cini was sent by DHL the original letters of 16 and 24 February 2017 signed by Ricardo Samaniego, as well as the 25 May 2017 declaration of ATC Administrators and other documents. The magistrate remarks that it was clear that MF did not accommodate Cini’s request on the declaration as he wished it, because their own files had no trace of any declaration of trust… legal services only limited themselves to say that they had no information other than what had been provided. “Indeed in the MF file there was no trace of any declarations of trust… These emails show how MF worked with clients. As long as they had backing documentation in their client files, they could provide certification and documentation. Otherwise they would not just come up with stuff. Although MF practices were lax on the verification and correctness of their client files, they paid attention on the information they gave their clients to ensure they were conforming with what they had told the Panama FIAU.”
Before March 2013 Egrant was one of three companies set up in Panama and acquired by Brian Tonna’s BTI Management, but it was just one of 14 offshore firms acquired since 2011 by BTI - they included known companies related to Keith Schembri such as Colson, Season, and Lester, Tonna’s SPX Services and Willerby Trade, Blue Sea Portfolio, Torbridge, and others. Harbinson’s word search found 350 unique references to Egrant in Nexia’s emails, which only intensified in January-March 2017 at the time of the PANA committee visit. A lot of documents relate to its formation, but there was relatively little activity in 2014 and 2015. Nexia’s formal relationship with Mossack Fonseca was only incorporated in March 2013, right before the request to set up new Panama companies. A question that stumps Harbinson is why Nexia went through the trouble of acquiring Egrant as a shelf company in 2013, when it lay dormant for years later but still bothered to pay its management fees to MF. With Egrant, Nexia paid $6,439 in fees up until its formal dissolution when they consistently assert there was never any client involved. Additionally, as early as April 2013, Nexia partner Karl Cini states in an email he does not want Nexia paying “Mosson fees if the client does not pay… me.” Harbinson suggest that while Nexia have stated in their testimony that there was no client for Egrant, it is unlikely that it would have borne the cost of maintaining the three Panama companies without being reimbursed. “It may be that because of the very close relationship Tonna and Cini have with these individuals, they are no longer regarded as normal clients and their financial dealings are handled differently than those of the general Nexia BT client base.”
After March 2013 The Egrant company is finally purchased in August 2013 on its own, not in the batch of three in which it had been previously ‘reserved’ when Keith Schembri’s and Konrad Mizzi’s Tillgate and Hearnvill were acquired. “It seems to us that [Karl Cini] must have had a client in mind when doing this. Why not make an arrangement for Nexia to have a number of shelf companies available on request?” The sole share in Egrant for Brian Tonna is held by ATC Adminstrators, of Panama. “In our opinion, [Egrant] does not fit in the with the way Nexia operated its business for its to pay for and hold on to these companies unless they had already been allocated to a client, and those costs could be recouped. Unfortunately it is difficult to ascertain whether Nexia BT was reimbursed for those costs…” After months of inactivity, Cini emailed Tonna a scan of an Egrant Certificate of Incumbency on 8 September, 2014, and then no more activity was registered. Between September and December 2015, Cini starts searching for banks for Tillgate and Hearnville, but nothing is explored in relation to Egrant. The target clients 17 Black and Macbridge of Dubai are also mentioned in December 2015. At one point, Cini used the Egrant incorporation and fees invoices as a template to show a Nexia employee how to pay a Mossfon invoice. Egrant remained dormant up to the spring of 2016 when the Panama Papers were published and dissolution of the company started. “Nexia felt it worth paying fees of $1,295 per year maintain Egrant, an apparently dormant shelf company, on the off-chance that some client might in future want an overseas company when such a company could apparently be speedily acquired from Mossfon at a fee of $1,365… “It therefore seems notable that just such a Panamanian company was required by Nexia BT client Pereiro in December 2015. However, rather than transferring Egrant to this client, a new Panama company, Real Trade Investments Global Corp, was purchased from Mossfon. We see no logic as to why Egrant Inc was not assigned to Pereiro at this time instead of going through the process of acquiring another new Panama company and then continuing to pay annual fees to maintain Egrant. This seems to imply that Egrant Inc was already assigned to a specific UBO. We can see no logic in Brian Torma originally purchasing Egrant or retaining it for as long as he did il, as he alleges, it was merely a shelf company.”
In her third testimony, Efimova says she never saw the company Al Sahra. “I don’t know, maybe it was a confusion because they had also Shams Al Sahra.” The magistrate says Caruana Galizia realised that something was not right, and that she had asked Efimova about the exact name of the company, to which Efimova was said to have assured her of the company name. “So did she mislead Caruana Galizia? If Caruana Galizia was saying the truth, then it means she believed Efimova while the latter was given her the wrong information deliberately.” Efimova categorically denied having made copies of the bank account opening forms for Al Sahra, although she claimed having seen them.
Efimova gave a contradictory statement. She said she first spoke to DCG, who then spoke to Pierre Portelli. She claimed she never showed DCG any documents but that it was DCG herself who showed her two declarations of trust, from her first meeting in March 2017 and then in April 2017. According to DCG, the person who first provided the declarations was male, a source whom she did not reveal, but who had told her the source was Efimova. “In any case, the versions of Efimova and Caruana Galizia over who had these documents was diametrically opposed.”
Contrary to what was stated on page 280, Caruana Galizia tells the magistrate in her second testimony, that she “does not have the documents, I saw them but they are not in my possession and they never were in my possession in fact, and I am telling people when they ask me why don’t I publish the papers, I say ok I would, but I cannot because I don’t have them.” When faced with the contradiction of her previous statement, Caruana Galizia replied: “Yes, I wanted to say that I knew where they were but not in my possession, and that at that stage I could not be clear about the whistleblower because nobody knew who she was, that is, I had access to the papers but they were not in my possession, and I needed them for their transcription.” DCG said that the scans of the alleged declarations of trust were in Efimova’s possession, and that she had seen a print-out, not a digital copy. “It had been someone else who showed them to me the first time… Efimova had the copies but I someone else had shown them to me, telling me they got it from her. She did not come to me directly. DCG said that Efimova “was 100% the source, the source of information.”
An alleged $400,000 emergency loan to Pilatus owner Ali Sadr Hasheminejad’s sister Negarin, which loan was supposed to be passed on to Michelle Buttigieg in New York, who ran the Buttardi jewellery company in partnership with Michelle Muscat, was not proven; instead, it was established that the February 2016 loan was of $1.5 million, used for the establishment of a pistachio farm the family owned in the USA.
Caruana Galizia had mentioned a former Nexia employee, Michael Satariano, as the one who handed the Pilatus bank opening forms for Egrant, and then later followed up on the alleged $1 million Al Sahra transfer. But the inquiry says this was impossible, because Satriano was longer a Nexia employee when Egrant was created in Panama, and that it was Nexia partner Karl Cini who established Egrant. However, forensic accountants Harbinson Forensics found that between February and March 2016, there was correspondence between Satariano and Efimova, in which the former complained about Pilatus’s delays and handling of two companies, Exiat Holdings and Privilege Limited, the clients of which were referred to as Corrado and Fiore respectively. Harbinson Forensics said that this episode matches a “pattern of correspondence that would correspond to Caruana Galizia’s story where she refers to Satariano, had the name of Exiat Holdings been Egrant instead, and the surname Corrado changed to Muscat. That is, part of the narrative told by Efimova matches exactly with other Nexia clients who used Pilatus’s services - but what she had did not correspond to Egrant or Michelle Muscat.”
There was disagreement between DCG and Efimova on how the alleged $1 million transfer from Al Sahra to Egrant took place. DCG had reported it as a “bank to bank transfer”, while Efimova said “it had to be” a SWIFT transfer. But Pilatus employee Brenda Calleja Smith, who said the bank used Oracle Flexcube to carry out SWIFT messaging, said it was impossible to bypass the SWIFT system. “I am not exaggerating. Even for €1,000, nobody does their transaction because it is ‘direct alert’, I mean, you are using SWIFT, you have SWIFT connection, to send instructions by SWIFT you should have a key between those two banks. Without key, you cannot send authenticated message.”
John Dalli had a Pilatus account which he opened in 2014 and closed in 2015, which money was a transfer from HSBC of just €2,000 to cover banking fees when the account became dormant.
P. 280. In her testimony to the magistrate, Caruana Galizia said she had been shown a scanned document by Maria Efimova, the originals of which she had not seen but which had been scanned. She described the document as an A4 paper, its contents written in a “normal font” with somebody’s signature. Caruana Galizia said she had retained a copy, but that she should not pass it on to the magistrate or publish it. The alleged declaration of trust was signed by MF employee Jacqueline Alexander, and according to Caruana Galizia, “employees of Western Union Money Transfer who had carried out work at Pilatus Bank” had confirmed the presence of the safe where this document had been contained.
The magistrate however says that Efimova, who started working as a Pilatus Bank intern before an FIAU compliance visit in March 2016, had contacted Caruana Galizia right before the Panama Papers broke; it was then she had taken out papers because she had seen the name ‘Michelle Muscat’ on them. The scanned papers were uploaded to Efimova’s personal iCloud drive, which according to Pierre Portelli, the then Malta Independent editor, were only accessible by Efimova through a VPN (virtual private network) on her device.
Caruana Galizia also said she rested on Efimova’s claims but did not see any clients’ lists or registers or ledgers, except for two bank account opening forms for Al Sahra FZCO and Egrant Inc - but the forensic accountants employed by the magisterial inquiry found no client at Pilatus Bank by the name of Al Zahra, nor for Egrant.
Efimova then told the magistrate she did not have copies of these documents.
The company "Society for Worldwide Interbank Financial Telecommunications" (SWIFT) is a cooperative company governed by Belgian law and whose head quarters is established in Belgium. SWIFT provides a service of financial communication that is standardised and secured, to its clients, that is financial institutions and companies and on average transmits 25 million messages on each working day. SWIFT is not a financial institution; we do not open or hold accounts, we do not transfer funds and we do not accept funds for transfer. SWIFT is rather a provider of services for financial institutions and companies (only corporations) allowing them to transfer in a secured way confidential and personal messages. The clients of SWIFT may, for example, exchange messages regarding transactions related bank accounts of physical persons, but the latter are clients of financial institutions corresponding, but not of SWIFT. SWIFT is in no way involved in the drafting of contents of messages of its users and has no personal interest in these same messages.
Besides, SWIFT has defined detailed procedures and policies re the protection of data and security and this, so as to protect the integrity of its services and data of its clients. Apart from this, due to the very way that its services of communication are conceived, there are inherent limits re the quantity of data that SWIFT messages conserves and re access of SWIFT to this data.
More particularly (1) SWIFT archives the messages of its clients for a limited period of time (124 days), after which the messages are irremediably destroyed, and (2) the data of archived messages for this period are stocked in such a format that does not allow one to do research on the basis of their contents. For example, it is not possible to search in the SWIFT messages archived info such as names of beneficiaries or authors, bank account numbers or other details re the financial transaction in question wfihin the SWIFT message. For these reasons, we are in the impossibility of replying positively to your request."