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!