MEP David Casa has slammed the accountancy board’s “dereliction of duty” over its failure to take any action against Nexia BT partners Brian Tonna and Karl Cini.
The board, chaired by Peter Baldacchino, regulates the accountancy profession in Malta and can recommend the revocation of an accountant’s or auditor’s warrant.
Mr Casa wrote a letter to the board in June, demanding that action be taken to withdraw the men’s warrants in light of the Panama Papers scandal.
Apart from a brief acknowledgement and promise to offer a response “in due course”, Mr Casa said the accountancy board had yet to get back to him.
Mr Casa insisted that their “dereliction of duty” diminished the worth of a Maltese accountancy warrant.
“Safeguarding the integrity of the accountancy profession is the board’s responsibility, yet so far it has failed to do so. It is no surprise that this too falls under the political responsibility of Finance Minister Edward Scicluna,” Mr Casa said.
Nexia BT, who were retained as consultants to the Prime Minister after the Panama Papers scandal, set up secret Panama companies for the Prime Minister’s chief of staff, Keith Schembri, and Tourism Minister Konrad Mizzi.
The firm failed to register the trust structures that held shares in the Panama companies, as required by local tax laws.
A magisterial inquiry is under way to establish whether a €100,000 payment that passed between Mr Tonna’s offshore firm into a Pilatus Bank account held by Mr Schembri was a kickback on passport sales.
Mr Schembri justified the transaction by claiming it was the repayment of a loan he gave to Mr Tonna in 2012. According to international accounting standards, it is unethical and unprofessional for auditors to take a loan from clients.
Mr Tonna’s firm Nexia BT has audited Mr Schembri’s local companies for over 20 years.
Instead of taking action against the alleged ethical breach, the accountancy board has said it would await the outcome of the magisterial inquiry, which is of a criminal nature.
Malta’s anti-money-laundering agency, the FIAU, raised concerns in a leaked report that Nexia BT partner Karl Cini had “withheld” information he was legally obliged to present about Mr Schembri’s and Dr Mizzi’s offshore holdings.
Last week, Mr Cini was called in for police questioning about his testimony in the Egrant inquiry. In 2017, both he and Mr Tonna resigned from the Malta Institute of Accountants after it formally announced an investigation into whether the two had breached its code of ethics and therefore brought the accountancy profession into disrepute.
The pair resigned their membership from the institute before the probe could be concluded.
Both men deny any wrongdoing.