Different exercises were taking place, some public others not, the head of the accountancy regulator said when asked about apparent inaction against financial advisory firm Nexia BT.
The Accountancy Board has been accused by MEP David Casa of dereliction of duty in the face of multiple reports of wrong-doing by Nexia BT, which had opened secretive structures for two top government officials.
Accountancy Board chairman Peter Baldacchino said the regulator could not publicise its every move. “We move consistently with what we have done in the past, that is all I can tell you,” he added.
Speaking in general terms without reference to Nexia BT, Dr Baldacchino said the board had always taken action when needed.
The Accountancy Board said in the past it would await the outcome of criminal inquiries before taking any action against Nexia BT and its partners, Brian Tonna and Karl Cini.
Both men resigned from the Malta Institute of Accountants last year after it was made known they would face disciplinary action in the wake of the Panama Papers scandal.
When it was put to Dr Baldacchino that his board had chosen to defer action pending the inquiries, he said there were different exercises in progress, some of them public and others not.
The Accountancy Board is charged with ensuring that auditors and accountants act ethically. Questioned if the board was looking into potential ethical breaches by Nexia BT, Dr Baldac-chino said that, in this kind of sensitive situation, one could not talk offhandedly.
Nexia BT had set up offshore structures for the Prime Minister’s chief of staff, Keith Schembri, and Tourism Minister Konrad Mizzi.
Despite the 2016 Panama Papers scandal, Prime Minister Joseph Muscat kept Nexia BT on as advisers. Mr Tonna, the managing partner, also retain-ed an advisory role with the Justice Minister.
Dr Baldacchino said the board had followed advice given by lawyers and was in communication with the Financial Intelligence Analysis Unit, the Malta Financial Services Authority and the Attorney General.
In a leaked draft report about Dr Mizzi, the FIAU had said Mr Cini, who had a legal obligation to report suspected cases of money-laundering as Nexia BT’s money-laundering reporting officer, withheld information about Dr Mizzi’s offshore structures.
Another FIAU report, passed on to the police, requested a criminal investigation into whether a €100,000 payment from Mr Tonna to Mr Schembri was meant as a kickback on passport sales. Mr Schembri says his long-time friend and auditor was merely repaying a loan given to him in 2012.
Auditors are not meant to enter into financial obligations with clients.
Asked why the Accountancy Board had not acted, given Mr Tonna’s own statements about the “loan”, in view of the ethical breach, Dr Baldacchino said he would like to comment but could not do so publicly.
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