The Maltese banking scandal of the 21st century

 

Earlier this week the Times of Malta reported that Island Oil Bunkers Ltd, in spite of  its staggering turnover of US$1,300,000,000,  or 1,300  million, between 2003 and 2011, managed to make accumulated losses of US$ 5 million and paid practically nothing in tax.

The  company’s “losses” caused the company to be in a situation of a net asset deficit, a case where the company’s assets (which in this case consist mostly of receivable from group companies and connected persons) are less than liabilities to third parties.  This is a case of a technical bankruptcy.  Audit Report issued by Deloitte is clean and unqualified.

The aforesaid notwithstanding, the  company has had very accommodative bankers, Christian indeed, who have allowed Island Oil Bunkers  Ltd loans and overdrafts of up to US$46,000,000 on a technically unsecured basis and at social interest rates typical of subsidised first time buyers home loans, ranging between 2.75% pa and 2.95% pa.  According to the audited accounts filed at MFSA, no tangible security  has been taken, no special hypothecs, no pledges, no ship’s mortgage, no personal guarantees from shareholders, whether those registered or those hidden, or from directors, whether those appearing in the MFSA files, or the shadow directors.  Only a general hypothec on the company’s assets has been taken, and this in a case where the company has negative net assets. 

As of the last audited accounts filed at MFSA, the loans and overdrafts amounted to circa US$36,000,000.

Ajma kemm jiswew ftit hbieb tal-hbieb!  Sew kienet tghid ommi  li ahjar habib fis-suq minn mitt skud fis-senduq!

The company’s audited accounts state that the company’s bankers are: Hsbc, Bank of Valletta, Lombard and APS.  No prizes for guessing which was this charitable and Christian bank to give a helping hand to Tancred and company. 

Whichever bank it was, this is a major scandal deserving of  investigation as to how our MFSA as the banking regulator ensuring our banks’ prudential standards allows the banks to dispense with the depositors’ money in this manner when it comes to friends, and friends of friends.  Of course when business borrowers  are not friends of friends then it is OK, the Banks takes all sorts of security for a multiple of the value of the loans and charge interest rates of anything up to 8% pa.

And if the Bank to have been so accommodative to Island Oil Bunkers is the Bank we have in mind, then the  issue is even more serious as it begs the question: such a big sum of borrowing to a company that is technically bankrupt on an unsecured basis at social interest rates must have had the borrowing approved  by its CEO, the bank’s directors, the  Chairman, past and present.  Has any legal action been commenced for the recovery of the credit?  Have any provisions been made? And who is going to be politically and legally responsible?

Very soon we shall have all the answers!

The above refers to the credit allowed to this company.  As many serious questions will also be  raised as to how the bank’s managers, executives, chief officers, internal auditors , compliance officers, reporting officers, chief operating officer, chief executive officer, past chairman and current chairman, external auditors, have all apparently considered frequent transactions of withdrawals of millions in cash in the largest denominations possible as not indicative of any suspicious activity and hence do not merit any  suspicious transaction report to the FIAU.  For example on 13th January 2013 US$ 250,000 were withdrawn from the US$ Account at Bank of Valletta Racecourse Street Marsa No 400 1511 3586. On the same day another 100,000 euro were withdrawn in cash from account number 400 1167 2843 from the same branch.

It is understood that the FIAU met at the MFSA last Monday in response to a report appearing in L-Orizzont the previous Thursday.  Financial Intelligence Analysis Unit my foot!

 

 

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Comments (8)

JAMES

- Sun 10-Mar-2013, 13:17

Truly interesting read!

TAL-MISTHIJA!

So when a perosn (mhux habieb tal-habieb) approaches a bank with guaranteed contracts which will employ around 120 person, the banks rewquest not only guarantees on property, gurantees on his contracts but they want gurantees on his underpants.

Then, when the hbieb tal-hbieb turn up, our superb banks open the doors, place red carpets and close their eyes.

Joseph, you are the new Prime Minister now and the citizens are expecting that an inquiry is set-up and see what was going on under the corrupt government we had up till some time ago.

THIS IS THE BEGINING OF A NEW TOMORROW. Who truly wants to CREATE work for those that want to work, our banks should be there to assist and to according to who you know.

Those bankers should be brought to justice.

WE WANT JUSTICE and nothing less!

alfred manin

- Fri 08-Mar-2013, 17:20

veru sabu poplu becun. why not bring the eu fraud squad to tackel this unbelievable situation.

BETTER FUTURE

- Fri 08-Mar-2013, 12:59

A vipers' nest if ever there was one. All friends of friends with no one raising any alarm bells whatsoever to protect the depositors, taxpayers and Maltese citizenry in general. I believe Forestals Group/Tancred Tabone and Deloitte used to share, and still do albeit in a different locality, the same building. Weren't Deloitte Price Club's auditors as well? Wasn't ABC the appointed liquidator in that scandal? What was the outcome in that case? Did the auditors get away scot free? After any concluded court cases, did the ex-Directors ACTUALLY forfeit any of their own cash? Or the birds had already flown the nest>

SO MANY RESPECTABLE, RELEVANT QUESTIONS. SO VERY FEW ANSWERS!

thomashedley

- Fri 08-Mar-2013, 09:01

With all these corruption cases emerging every day Malt and the Maltese at least i hope that every body involved will be brought to justice and pay for his crimes but most important we want all that money back The ice berg is emerging from the bottom

HAWKEYE

- Fri 08-Mar-2013, 09:01

NO WONDER MALTA HAS AN OBESITY PROBLEM!EVERYONE IN THE KNOW IS PORKING OUT ON THE TAXPAYER AS IF THERE IS NO TOMORROW.

ta kafkaf

- Fri 08-Mar-2013, 07:49

u jiena meta mort nigbed 25000 euro mill BOV Preluna l-manager ma ridx itihomli jekk ma nghidlux ghalfejn ridthom, vera mafia

l fenech

- Fri 08-Mar-2013, 03:05

Wasalna fi stat fejn m'hemmx limitu ghal l'iskandli. Il-korruzzjoni hakmet lil-kullhadd.

Zoltan

- Thu 07-Mar-2013, 22:51

The cheek of the PN today lies incrying wolf over the old MLP's excesses in the late 1980s. Compared to these staggering examples of institutionalised corruption and political/business revolving doors (remember the Xibka they used to boast about?), the MLP "black sheep" in those days were rank amateurs and their efforts mere child's play compared with those of these hardened fraudsters and criminals!

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