An offshore company owned by murder suspect Yorgen Fenech wired millions to an Italian oil-trading outfit later mired in corruption and fraud accusations, documents show.

An investigation by Times of Malta and Italian weekly L’Espresso has uncovered a money-trail starting from the United Arab Emirates (UAE) and leading to Malta, Italy and Azerbaijan. The €2.5 million paid by Fenech’s offshore UAE company, Wings Investment, to oil traders Napag Italia, opens a window into the businessman’s secret entry into the fuel trading and bunkering business.

Questions were raised about Fenech’s relationship with Napag during a September 2018 review by Noorbank of accounts held in the UAE by his once-secret company 17 Black, and its sister company Wings Investments. At the time, Fenech’s ownership of 17 Black and Wings Investments was not publicly known, only being exposed months later by Times of Malta and Reuters.

Documents seen by Times of Malta show Wings Investments wired €1.3 million to Napag Italia in October 2017. A further €1.2 million was paid to Napag the following month, via Noorbank.

All activities and transactions carried out by 17 Black and Wings are the subject of a magisterial inquiry into potential money-laundering and corruption, with particular focus on Fenech’s ties with former government officials Keith Schembri and Konrad Mizzi. A leaked 2015 Panama Papers e-mail had indicated plans for 17 Black to send over €2 million annually to Schembri’s and Mizzi’s Panama companies.

All involved deny any wrongdoing. Fenech has been charged with complicity in the murder of Daphne Caruana Galizia.

Napag and its founder are facing their own legal inquiries, having last year been indicted in Italy for fraud and corruption over a fuel consignment of dubious origins it sold to Italian oil giant Eni in 2019. The company’s founder Francesco Mazzagatti has also been charged with money laundering for allegedly disguising payments to buy the Mehr petrochemical plant in Iran, by routing the money through a number of Dubai accounts.

Fenech justified his relationship with Napag during Noorbank’s review by saying the transactions involved his personal bunkering business.

Hidden interests

Fenech quietly entered the fuel trading and bunkering trade in 2016, hiding his interests in the sector behind his business associate and friend Nick Frendo. The Tumas magnate’s interests in the companies were shielded from public view, using nominee shareholders.

Two years earlier, Frendo had “introduced” a Miami-based fuel trading company to Malta’s state-owned bunkering company, MOBC. The Miami company was controversially given a concession by Konrad Mizzi’s ministry for exclusive use of state-bunkering facilities owned by MOBC.

When contacted, both Frendo and Fenech denied having any involvement in the concession.

Frendo said there were initially talks between his company Internship and the Miami company about forming a consortium, but this never materialised.

Sources say police opened a “file” on Fenech’s local bunkering interests, as part of a number of “files” opened after the businessman’s November 2019 arrest for his alleged complicity in Caruana Galizia’s murder. Many of the “files” have yet to be translated into prosecutions by the police.

Contacted by Times of Malta about the Wings Investments payments and his bunkering business, Fenech’s lawyer said: “The business alluded to in your questions seems to be perfectly legitimate business carried out by private individuals in private undertakings. Unfortunately, the angle pursued, presumably of interest to the public at large, is not clear. Mr Fenech strongly denies any insinuations of wrongdoing.”

The ‘Socar Project’

Within a year of entering the fuel trade, World Bunker Suppliers, one of the Maltese companies secretly owned by Fenech and fronted by Frendo, started trading out of Fujairah, an oil trading hub in the UAE.

The €2.5 million paid by Fenech’s offshore UAE company, Wings Investment, to oil traders Napag Italia, opens a window into the businessman’s secret entry into the fuel trading and bunkering business.

Dubbed as the ‘Socar Project’, documents show Napag acted as an intermediary to deliver fuel oil in Fujairah purchased from Socar to World Bunker Suppliers. World Bunker Suppliers would then sell those consignments to its own customers.

Despite the invoices being addressed to World Bunker Suppliers in Malta, two of the invoices issued by Napag were instead settled by Fenech’s secret offshore company Wings Investments in the United Arab Emirates. These payments were marked internally as ‘shareholder loans’ by World Bunker Suppliers.

An audit carried out on World Bunker Suppliers’ operations in 2017 flagged how Fenech received at least three ‘cash’ payments of €18,750 monthly between October and December 2017, as interest on the ‘loan’.

The documents reviewed by Times of Malta show World Bunker Suppliers’ bunkering operations were accounted for in the accounts of another company owned by Frendo, called International Fuel Services. They were then recharged back to World Bunker Suppliers.

Sources familiar with the company’s operations say World Bunker Suppliers only got its own internal accounting software in 2018. The company has also neglected to file audited accounts ever since it was set up in 2016, in breach of statutory requirements.

In turn, International Fuel Services’ last available accounts date back to 2017, when it was audited by then Nexia BT partner Manuel Castagna. Nexia BT’s partners, including Castagna, stand accused of money laundering in an unrelated case involving Keith Schembri.

Frendo ‘unaware’ of how Fenech paid Napag

Contacted by Times of Malta, Frendo confirmed Fenech was an “indirect shareholder” of World Bunker Suppliers. He said Fenech had proposed to arrange financing of the Napag invoices, but he was unaware how the payment to Napag had been arranged by Fenech.

“The amounts corresponding to the Napag receipts were then booked as loans at arm’s length… in the accounts of the company, as per course of normal business,” Frendo said.

Frendo said he “cannot confirm” that the interest payments on the loan were made in cash. “The interest payments were duly recorded in the books of the company,” Frendo said.

On World Bunkers Suppliers’ failure to file accounts, Frendo said an audit firm had been engaged to perform the audit work for 2017, which was completed at the end of 2019. However, Frendo said, the audit firm resigned “in view of the developments surrounding Mr Fenech at the time [his arrest], and thus no audits were filed”.

“The company has been inactive since mid-2018 and the intention is to liquidate/dissolve the company,” Frendo said.

Napag’s Italian scandal

Napag Italia and its founder Francesco Mazzagatti were last year been indicted in Italy for fraud and corruption over a fuel consignment of dubious origins it sold to Italian oil giant Eni in 2019.

Napag first came to Italian prosecutors’ attention during a 2018 raid on lawyer Piero Amara’s Rome office. During the Amara investigation on suspicions of bribing members of the judiciary, investigators found a stash of documents and e-mails from Napag Italia.

Amara is suspected to have used his contacts at Eni to enrich Napag through lucrative contracts from the Italian oil giant, for which he was then given a share of the profits by Napag.

The following year, Napag found itself at the centre of a corruption scandal in Italy for allegedly duping Eni into accepting a cargo that included Iranian oil targeted by US sanctions. A forensic investigation commissioned by Eni last year shows Fujairah was the same port used by Napag to discharge oil and gas secretly loaded in Kharg Island, Iran.

Napag was indicted last December on corruption, money laundering and fraud charges over the suspect fuel consignment it tried to sell to Eni. The company’s founder Francesco Mazzagatti is facing fraud charges over the Iranian oil consignment Napag sold to Eni in 2019. He is also facing corruption charges for allegedly bribing an Eni trader to help Napag win two contracts with the Italian giant.

Mazzagatti has also been charged with money laundering for allegedly disguising payments to buy the Mehr petrochemical plant in Iran, by routing the money through several Dubai accounts. He denies the charges.

Contacted for comment, Mazzagatti said he did not know who owned World Bunker Suppliers nor Wings Investments. Mazzagatti said Napag’s dealings with World Bunker Suppliers and Wings Investments were carried out by the commercial heads of the respective companies, therefore who owned the two companies in questions was never an issue that was looked into.