The transactions that raised money-laundering suspicions included direct payments made to Adrian Hillman’s personal bank accounts by Keith Schembri, the Times of Malta is informed.

Inquiries by the Financial Intelligence Analysis Unit found that €650,000 Mr Schembri and his companies, among them Kasco Engineering, paid to Mr Hillman, former managing director of Allied Newspapers, from 2011 to 2015, included a €100,000 transfer on November 18, 2011, shortly after Progress Press opened a new state-of-the-art €30-million facility in Mrieħel, sources said.

Asked to explain why Kasco Engineering and other companies of the Kasco Group, including those directly involved in the Progress Press project, had transferred large amounts of money to Mr Hillman’s personal accounts, both Mr Schembri, the Prime Minister’s chief of staff, and Mr Hillman refused to comment.

READ: Magistrate Demicoli to lead inquiry into allegations

They would only say that the payments had nothing to do with the Progress Press project and attributed them to undisclosed work carried out in Mr Hillman’s personal capacity for Mr Schembri and his companies. According to letters bearing the signature of Brian Tonna, Mr Schembri’s private business accountant, who also served as consultant at the Office of the Prime Minister after 2013, the money paid by Kasco Engineering to Mr Hillman was “for services rendered in relation to business in the editorial and publishing sector”.

Mr Hillman did not reply when asked whether he had informed his employer and fellow directors about the services he gave to Kasco on a private basis while he served as managing director.

“Your company [already] came to its own conclusions, and I have no further comments to make,” he said.

Mr Hillman also refused to state whether his private work was done in breach of his employment contract.

Mr Schembri would not say what type of private work Mr Hillman was doing for his companies at the same time that Kasco was supplying Allied Newspapers with equipment, including newsprint, and other stuff.

He insisted that the transfers of money to Mr Hillman had nothing to do with the new Mrieħel facility that was built under Mr Hillman’s watch.

“The supply of printing machines made by Kasco Engineering to Progress Press was ordered in 2008 and was the cheapest, to the tune of €2 million, and was accepted by the whole board,” Mr Schembri said.

An independent inquiry into allegations of graft involving Mr Schembri and Mr Hillman was commissioned by the Allied Group last year after the Panama Papers revelations. The inquiry conclusions remain unpublished.

The board of directors of Allied Newspapers said in a statement yesterday that the company had no knowledge of €650,000 allegedly paid to Mr Hillman by Mr Schembri. 

Payments dating to the time Progress Press opened its Mrieħel facility raised FIAU suspicions. Photo: Jason Borg

Nationalist Party leader Simon Busuttil has submitted evidence to a magistrate relating to the €650,000 paid by Mr Schembri to Mr Hillman. The Sunday Times of Malta has reported that the FIAU concluded that “sufficient information to conclude that a reasonable suspicion of money laundering subsists in the case involving Mr Schembri and Mr Hillman”.

The FIAU report was passed on to the Police Commissioner for further investigation last November. No action is known to have been taken by the police so far.

During yesterday evening's Xarabank debate, Dr Busuttil said he would be making the report, as well as two others concerning suspicions about cash-for-passport kickbacks and activity at Pilatus Bank, public. 

Allied Newspapers statement

The Board of Directors of Allied Newspapers once more makes reference to statements made in public by the Prime Minister, Mr Keith Schembri and Mr Adrian Hillman which speculate without any factual basis on the internal investigations carried out by the company in connection with allegations of fraud committed by their former managing director Mr Adrian Hillman made by Ms Daphne Caruana Galizia in March 2016. Reference is also made to a number of questions the Company has received from sections of the press.

The Company confirms the following:

1. The Company has no knowledge of payments amounting to €650,000 allegedly paid to Mr Hillman by Mr Keith Schembri through offshore companies as stated in a press conference by the leader of the Opposition on May 17, 2107, nor on whether they were related to matters involving the Allied Group;

2. Consequently, the allegations on such payments could not have been part of the inter-nal investigation carried out by the company which concluded its workings in June 2016;

3. For the same reasons, any conclusions reached by Mr Hillman as stated in his press release also of May 17, 2017, that “nothing illegal or of a criminal nature as alleged by Simon Busuttil” resulted from the company’s internal investigations are misleading and gratuitous, since the internal investigation concluded its works in June 2016;

4. According to the Leader of the Opposition, the Allied Group, if anything, could have been the victim of any criminal activity if confirmed by the magisterial inquiry.

5. The Company will therefore be following the workings of the magisterial inquiry which will investigate the allegations and examine the documentation presented by the Leader of the Opposition, and the company will request a copy of the findings of the Magisterial Inquiry to establish if any “illegal or criminal activity” was conducted to the prejudice of the Allied Group. The company will of course cooperate with the magisterial Inquiry if so required.

6. The internal investigation conducted by the Independent Board of Inquiry set up by the Allied Group could not at law have access to information related to any offshore activity, nor enjoy any powers at law to receive evidence under oath nor to summon witnesses who did not wish to participate in its workings. On the other hand, the magisterial inquiry is empowered by law to have recourse to all these investigative instruments.

7. The Board of Directors of Allied Newspapers Limited has, without exception, always respected the full independence of the editorial staff of its media stable. The Board, therefore, never requests to know any investigative material in the hands of its media journalists in the full knowledge that the protection of the journalistic sources of its journalists is a fundamental principle of the freedom of the press.

The internal investigation also complied in full with this principle;

8.  The Allied Group therefore welcomes the magisterial inquiry so that judicial certainty may finally be reached on the exoneration or otherwise of those investigated by it.