High-ranking Maltese Officials Accused in New Azerbaijani Financial Scandal

Maltese blogger and investigative journalist Caruana Galizia has accused several high-placed Maltese political figures of a money laundering scheme connected with the Azerbaijani presidential family.

The Maltese Prime Minister’s wife, Michelle Muscat, Minister Konrad Mizzi and the Prime Minister's chief of staff Keith Schembri are the three individuals supposedly involved in the scheme.

A company owned by the Azerbaijani president’s daughter, Leyla Aliyeva, transferred significant sums of money to Keith Schembri’s and Konrad Mizzi’s Panama companies, Tillgate Inc and Hearnville Inc last year in the form of “loans payments”, according to Galizia.

Money was also transferred to a third company, Egrant Inc, whose shares are held by the Maltese Prime Minister’s wife, Michelle Muscat.

All three companies were named in the Panama papers.

“In front of the Maltese public, I swear, I categorically deny I had, or have, any type of undeclared account or company in Malta or overseas”, said Maltese Prime Minister Joseph Muscat earlier this week at a press conference.

Payments, the blogger claims, were made from Al Sahra FZCO, a company registered in Dubai and whose ultimate beneficiary is Leyla Aliyeva through Pilatus Bank. The Bank belongs to  Seyed Ali Sadr Hashemenijad, an Iranian citizen who set up the bank in 2013.

In 2016, a report issued by the Malta Financial Services Authority (MFSA) identified several failures in the Pilatus Bank system in preventing money laundering. Specifically, the investigation spotted significant deficiencies in how the bank was dealing with politically exposed persons (PEPs) from high-risk jurisdictions, the TimesofMalta reports.

According to Galizia,  60% of Pilatus Bank’s deposits belong to Azerbaijani politically exposed persons (PEPs), among which the Azerbaijani Minister for Emergency Situations, Kamaladdin Heydarov and the son and the daughter of the Azerbaijani President, Heydar Aliyev and Leyla Aliyeva. The bank has denied all accusations.

Galizia’s accusation has yet to be proved as the journalist has not provided the documents supporting her declarations. In the meanwhile, over the last two weeks, Tillgate Inc and Hearnville Inc were liquidated whereas  Egrant Inc was dissolved.

The Maltese scandal erupted at the same time the Azerbaijani Foreign Minister Elmar Mammadyarov was on an official visit to Malta.

Over the last few years, Azerbaijan and Malta have increased cooperation mainly in the energy sector.

Back in 2014, Maltese Prime Minister Joseph Muscat, together with his chief of staff Keith Schembri and the then-Energy Minister Konrad Mizzi paid a visit to Baku, as a result of which two memoranda of understanding – one on strategic cooperation in the field of energy and one with SOCAR – were signed.

“This agreement will lead to our country cooperating with one of the greatest energy centres to continue developing the foundations of a regional energy hub”, Muscat said of the meeting back then.

Currently, there are several companies in Malta linked to Azerbaijan, such as SOCAR Trading Shipping Limited, OCAR Oil & Gas International Limited, SOCAR Oil & Gas International Holding Limited, SOCAR Investments And Finance Ltd, SOCAR Trading Shipping Limited and many more.

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