TOP STORY/€4 million in loan and overdraft facilities at Bank of Valletta for PM’s chief of staff’s loss-making business

Published: May 12, 2016 at 4:27pm

Following the Labour Party’s election to government in 2013, Keith Schembri, who was now chief of staff to the Prime Minister, moved a big chunk of his business banking to the Bank of Valletta, where he was employed as a clerk in the early 1990s (sources at the bank say that he was asked to leave).

Sources at the bank have confirmed that there he obtained loan and overdraft facilities of €4 million for Kasco Holdings Ltd, Kasco Ltd and Kasco Engineering Ltd. Kasco Holdings Ltd, the parent company, is 99.9% owned by the Prime Minister’s chief of staff. It registered a loss of €431,419 in the last published set of accounts, which are for the year ending 31 December 2014, and which were filed with the Companies Registry almost a year late, last December. Accounts for 2015 have not yet been filed. The accounts filed for the year ending 31 December 2013 report a profit of €68,331.

The most recent published accounts show that Kasco Holdings Ltd has total liabilities of €8,366,191 (against total assets of €10,141,896), which include long-term loans of €1,785,259 and short-term loans/overdrafts of €4,655,618. Bank overdrafts alone amounted to €3,897,112 in 2014 (compared to €4,628,960 in 2013).

In 2014, Kasco Holdings Ltd paid the banks almost a quarter of a million euros in interest alone, but paid just €34,246 in income tax. Except that it didn’t pay that even that relatively small amount which it owed on paper because that same year it received a tax refund of €73,197, which cancelled it out almost twice over.

Besides what it owes the banks, Kasco Holdings Ltd also has “third party loans” of €580,694 (2013 – €941,368) repayable over five years at 6%pa, and a further third party loan of €136,676 (which shows no change from the previous year) which is interest-free and repayable over two years. Both loans are secured by monthly bills of exchange.

Through his business, Kasco Holdings Ltd, the Prime Minister’s chief of staff owes the banks in Malta and third-party lenders almost €6.5 million. Yet in January 2011, he set up a secret company in the British Virgin Islands, Colson Services Ltd, and in May 2013 he used the services of Brian Tonna at Nexia BT – who audits the accounts for Kasco Holdings Ltd – to restructure that BVI company for greater secrecy, hiding his identity behind a nominee director and nominee shareholder.

At the same time, also using the services of the accountant who audits his official accounts in Malta, he set up a secret company in Panama, Tillgate Inc, and hid his ownership of it by creating a New Zealand trust, called Haast, to hold the shares in Tillgate.

The full document is uploaded here: Kasco Holdings Ltd – published financial statement for the year ended 31 December 2014

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Keith Schembri, the Prime Minister's chief of staff, whose business owes the banks and third-party lenders more than €6 million but paid just €35,000 in income tax, even as he set up secret companies in Panama and the British Virgin Islands for undisclosed purposes. The secret companies were set up by the same account who audits his official business accounts in Malta, Brian Tonna, who has been given a desk at the Office of the Prime Minister, for an undisclosed reason.

Keith Schembri, the Prime Minister’s chief of staff, whose business owes the banks and third-party lenders more than €6 million but paid just €35,000 in income tax, even as he set up secret companies in Panama and the British Virgin Islands for undisclosed purposes. The secret companies were set up by the same account who audits his official business accounts in Malta, Brian Tonna, who has been given a desk at the Office of the Prime Minister, for an undisclosed reason.