Modest tax declarations by Electrogas power station investor Paul Apap Bologna have raised tax evasion red flags with the local authorities.
Apap Bologna, a wealthy medicines importer, declared to have earned €41,000 in 2016, €40,000 in 2017 and €41,000 in 2018.
Red flags were raised when investigators tallied these tax declarations with the incoming payments into Apap Bologna’s local bank accounts.
Sources privy to investigations into the businessman said Apap Bologna received €138,000 in incoming credit payments into his accounts in 2016 alone, triple the amount of income he declared to the tax authorities for that year.
Similar disparities, details of which were obtained by the police’s financial crimes department in November 2022, were noted for Apap Bologna’s 2017 and 2018 tax declarations.
No income tax declarations were filed by Apap Bologna for 2019 and 2020, according to the information received by the police.
Over those two years, he received over half a million into his local accounts.
Apap Bologna is already on the tax department’s radar, having last year been served with a notice to pay €22,500 in tax dues, according to court filings.
Apap Bologna did not respond to a request for comment when contacted by Times of Malta.
The businessman is considered a person of interest in an ongoing money-laundering and corruption probe linked to fellow Electrogas investor Yorgen Fenech.
Times of Malta revealed in 2021 how Apap Bologna owned a secretive structure in the United Arab Emirates (UAE) with a similar blueprint to Fenech’s company 17 Black. A leaked Panama Papers e-mail revealed plans for 17 Black to pay up to $2 million yearly into Panama companies owned by ex-government officials Keith Schembri and Konrad Mizzi.
At the time of the 2015 e-mail, Mizzi was responsible for the Electrogas power station project, while Schembri, a close friend of Fenech, was Prime Minister Joseph Muscat’s chief of staff.
Documents show a circular money flow between Apap Bologna’s UAE company Kittiwake and Wings Investments, another UAE company owned by Fenech.
Times of Malta is informed that Kittiwake was also used to carry out several purchases from companies selling jewellery and marine equipment.
Apap Bologna resigned as the Maltese representative on the Electrogas board after Times of Malta exposed him as Kittiwake’s owner.
The medicines importer had replaced Fenech as an Electrogas director, following Fenech’s November 2019 arrest in connection with journalist Daphne Caruana Galizia’s murder. Fenech, who has yet to face trial over the murder, denies any involvement in the assassination.
Declarations v bank payments. Graphic: Times of Malta‘Right to silence’
Apap Bologna has been one of the many witnesses summoned to testify in an ongoing parliamentary probe into the Electrogas contract.
He invoked his right to silence when faced with questions from MPs about his ties to Kittiwake and 17 Black.
Apap Bologna signed off on a deal to pay Fenech €2.5 million in success fees for handling the Electrogas project and “interfacing with authorities”.
The Electrogas contract and Fenech’s ownership of 17 Black has been identified by murder investigators as a potential motive behind Caruana Galizia’s murder.
US authorities banned Schembri and Mizzi from travelling to the United States due to a “corrupt scheme” leading to the contract award.
Schembri and Mizzi deny wrongdoing.
In testimony to parliament last week, ex-prime minister Joseph Muscat admitted to meeting both Apap Bologna and Fenech’s father George, prior to the March 2013 election that swept the Labour Party to victory.
Muscat, however, denied ever discussing the project with either Apap Bologna or Fenech during these meetings.