I’m curious to know whether he holds his villa/house in his own name or through some SPV. The money held in the BVI structure probably adds up to a sum enough to buy a reasonably priced SME property.

The rationale for holding a Maltese property through an offshore SPV is that one can circumnavigate taxes when one comes to sell the property. It’s a simple transfer (paper) of ownership of SPV as opposed to a usual routine sale contract subject to Maltese stamp duty.

Muscat says that Mr Schembri is a GOOD businessman. We have to re-define “good”.

I think you will find that the profits are all being shored up in the offshore companies and this state of affairs is classic tax evasion.

This would have meant asking him to provide further detailed information about his businesses in compliance with anti-money laundering regulations. He must have then moved his business to the Bank of Valletta to try and avoid the nuisance of new controls imposed by the HSBC Group, which was in the middle of the de-risking exercise that it was forced to undertake by the American Financial Regulator, following the Swiss and Mexican debacles (the exercise is ongoing).

Since then HSBC Bank has disposed of trusts, of funds custody and administration, and of other business deemed risky – not just in Malta but the world over. The Bank of Valletta is slowly catching up because it is beginning to understand the need to de-risk the balance sheet even if it means reducing its profitability. It is the right thing to do and it strengthens Malta’s status as a financial centre.