The Accountancy Board will wait for the conclusions of magisterial inquiries before deciding whether to proceed against Nexia BT or its directors Brian Tonna and Karl Cini, sources said.
The board has the power to investigate the behaviour of accounting firms and can even withdraw operating licences and warrants of erring accountants.
Nexia BT, the financial advisers who created offshore setups for minister Konrad Mizzi and the Prime Minister's chief of staff Keith Schembri, this week denied claims they withheld information from the Financial Intelligence Analysis Unit.
However, directors Mr Cini and Mr Tonna, authors of leaked e-mails which led the FIAU to suspect money-laundering activities, refused to answer specific questions about their actions, invoking “professional secrecy”.
When approached, Mr Cini would not even refer to information now in the public domain.
He was asked, for instance, whether his e-mails and their contents followed instructions by Dr Mizzi and Mr Schembri and if he had passed on such e-mails to the inquiring magistrate.
Insisting he was bound by “professional secrecy and client confidentiality”, Mr Cini said he was precluded from answering any questions, adding he “cooperated fully with the investigative authorities”.
When it was pointed out that the information sought was not about individual clients but published documents bearing his name, Mr Cini still declined to comment.
Quoting a leaked FIAU report, the Times of Malta said earlier this week the government’s anti-money laundering agency noted that Nexia BT withheld information during investigations involving Tourism Minister Konrad Mizzi and the Prime Minister’s chief of staff, Keith Schembri.
According to the report, after the Panama Papers leaks in March 2016, the agency had demanded copies of all correspondence between Nexia BT and the Panama law firm Mossack Fonseca as well as exchanges between the audit firm and Dr Mizzi and Mr Schembri.
Nexia BT told the FIAU investigators that “all instructions and discussions with clients” were verbal, which the agency deemed “suspicious”.
The FIAU also remarked in the leaked report that e-mails published by the Times of Malta were not passed on to the authorities by Nexia BT.
Referring to an article on the Times of Malta titled ‘Nexia BT “withheld” information from FIAU’, Mr Tonna denied that Nexia BT had withheld any information from the authorities.
“On the contrary, and as we have stated consistently, we have cooperated fully with them and will continue to do so,” he insisted.
With regard to the rest of the same article, he said his company was “precluded from fully addressing the allegations due to client confidentiality and professional secrecy obligations at law, as well as in light of the ongoing magisterial inquiries. Nonetheless, we continue to categorically deny any wrongdoing, both from a legal and also from a conduct perspective.”
Accountancy Board has power to withdraw warrants
Leaked documents released by the Daphne Project include e-mails by Mr Cini indicating an association between 17 Black, a Dubai company, the LNG tanker feeding the Delimara power project and Dr Mizzi and Mr Schembri’s Panama companies.
Mr Tonna, the auditor of Mr Schembri’s group of companies, Kasco, has admitted publicly to taking a €100,000 personal loan from his client.
A leaked FIAU report has raised suspicion that Mr Tonna paid kickbacks to Mr Schembri from the sale of Maltese passports.
However, he told the anti-money laundering agency the transaction was a private ‘loan’ from Mr Schembri to help him in cash flow difficulties he had encountered in a personal matter.
According to international accountancy standards, accountants and auditors are prohibited from taking loans from clients.
Accountants who spoke to this newspaper felt that, on this basis alone, the Accountancy Board could put in motion procedures to withdraw Mr Tonna’s warrant as such behaviour amounted to a clear breach of ethics.
The Malta Institute of Accountants had started procedures against Mr Tonna and Mr Cini who had demanded such action should stop pending a decision by the court. They withdrew their membership of the institute, hence halting the procedures against them.
The institute has no legal powers to withdraw accountants’ warrants.