The Malta Independent 15 May 2024, Wednesday
View E-Paper

Gaping hole in Gasol audited accounts after Malta exit

David Lindsay Sunday, 20 May 2018, 11:30 Last update: about 7 years ago

The latest available financial statements of Gasol, the former lead partner of the Delimara power station project that has been mired in controversy, mysteriously show nothing but a blank space in a note meant to contain the specific financial details about the company’s exit from the Malta project.

Those last filed accounts refer to the year ended 31 March 2015 but they were not formally filed in the United Kingdom until September 2017. In the interim period, Gasol had exited the Malta project for an undisclosed sum, and that sum, and where the funds may have gone would have been useful information to disclose about the transaction.

ADVERTISEMENT

The accounts, formally filed in the United Kingdom in September 2017, clearly state that the Gasol Group had “exited the [Malta] project as detailed in note 30”, but when it comes to note 30 and the details of its exit from the Malta project, the group’s audited accounts show nothing but a curious blank space.

In accordance with company law and accounting standards, company directors are required to include in the financial statements adjustments and/or disclosures, depending on the case, about significant transactions and events concerning the company (or its group) which take place between the accounts’ date and the director’s signature date, i.e. between 31 March 2015 and 4 September 2017 respectively in Gasol’s case.

Nothing about the Malta project, however, is found even though it is advertised as being contained in note 30 of the accounts in the director’s report earlier on in the 64-page document.

The matter could be put down to an anomaly or an accounting error but it takes on a different tone altogether given the controversy surrounding the project and the exposure of former energy minister Konrad Mizzi in the Panama Papers, and the fact that Gasol had sold its Electrogas shares on the very same day that Mizzi’s Panama company had been transferred to his New Zealand trust.

The next day, 23 July 2015, an FIAU report leaked to this newspaper had confirmed that money had been transferred to the Dubai company 17 Black, whose function, according to the FIAU reports, was to transfer money to the Panama companies belonging to Mizzi and another Panamanian company owned by the Prime Minister’s chief of staff Keith Schembri.

Moreover, this newspaper had also revealed how Mossack Fonseca, the Panama-based law firm at the epicentre of Panama Papers, handled both Gasol’s parent company through the Mossack Fonseca’s Seychelles office, as well as the affairs of Mizzi and the Schembri through other offices around the globe, including one in Malta.

Accounts should have included details of Gasol’s Malta exit

Gasol exited the Maltese consortium in July 2015.  Upon its exit, Gasol transferred its 3,000 shares – equivalent to a 30 per cent stake in the total share capital of Electrogas - to the other consortium parties, namely Siemens Project Ventures, GEM Holdings and Socar Trading.

The share transfer document does not show the transfer value of the shares, which value was never made public by Gasol, and is now missing from the financial statements filed in 2017.

Financial specialists who spoke to this newspaper had estimated that the value of Gasol’s shares in Electrogas at the time of the sale may very well have amounted to tens of millions of euros.

Therefore, the date of Gasol’s exit from the Malta project was after the period reported upon in the accounts to 31 March 2015, but is well before 4 September 2017, the date on which the directors signed the financial statements, resulting in an obligation on the directors to make the necessary adjustments or disclosures with respect to the Malta exit transaction.

The directors’ report and the accounts for 31 March 2015 were signed by one sole director – Liberian national Ethelbert J.L. Cooper.  The audit report was signed by Ryan Ferguson, for and on behalf of BDO LLP, one of the largest global professional services networks of accounting, tax and business advisors.  The accounts were then filed with the UK’s Companies House on 12 September 2017.

Details about Malta exit should be in note 30 of the financial statements

The financial report, in fact, includes multiple references to the Malta project.  Very specifically, in the Strategic Report, which is set out on pages four to seven of the financial statements, Cooper states that:

“The project in Malta, in which Gasol participated in and led an international consortium, acquiring 30% equity-accounted interest in the year, is to deliver and regasify LNG in order to supply gas to both an existing power plant and to a newly constructed power plant built by the same consortium.  This project entered into the construction phase through a temporary bridge loan supplied by Bank of Valletta at the end of the month of December 2014 with construction anticipated to complete in 2017.  During the year, the Group received a project development fee of Euro 2,000,000 (Sterling 1,580,320) under the terms of the project agreement.  Subsequent to year-end, the Group exited the project as detailed in note 30.”

The Strategic Report’s last subheading is ‘subsequent events’, which is the technical accounting term used to refer to events that require adjustment or disclosure up to the time of the signing of the accounts, and the Strategic Report states “Refer to note 30” for details on the accounts of the Malta project exit.

Note 30 shows no details of Gasol’s exit from Electrogas

The accounts do, in fact, contain a note 30 entitled ‘Subsequent events’ spread out on pages 55 to 56.  The note refers initially to some group debt restructuring carried out in May 2017 and then it chronologically lists a number of events that took place between 7 April 2015 and May 2015, none of which relate to Malta.

However, the note breaks off abruptly after a reference to an event about the company’s business in Benin in the second quarter of 2015.

No further details of events are listed from the third quarter of 2015, which starts from July 2015 - the month in which Gasol sold its shareholding in Electrogas - to 4 September 2017, even though the Strategic Report that refers to details being given in note 30 suggests a certain volume of information about the Malta exit is included in the accounts, as would be required in terms of ‘subsequent events’.

Among the more important information that one would expect to find about the disposal of the Electrogas shares there would be the parties to the share sale transaction and the details of their role in the transaction, the share transfer value, the basis of the valuation, any particular application of the proceeds from the sale, the terms of collection of the sales proceeds, as well as details of any remaining ties, perhaps under contractual arrangements or under the share sale agreement, with Electrogas or its other shareholders or other stakeholders.

Nothing, however, is to be found and the financial statements continue with other notes on other subject matters on page 57.

Gasol’s exit from Electrogas shrouded in controversy and mystery

On 20 March 2016, this newspaper had revealed how Gasol had sold its Electrogas shares on the very same day that Konrad Mizzi’s Panama company was transferred to his New Zealand trust. 

Earlier in February 2016, Mizzi had shown paperwork to this newspaper showing that the shares in his Panamanian company Hearnville Inc had been held by ATC Administrators Inc, a company with the same address of Mossack Fonseca in Panama, for the benefit of Mizzi between 2 June and up to 21 July 2015.  Mizzi had explained that on 22 July 2015, the shares in Hearnville were transferred to Mizzi’s Rotorua Trust based in New Zealand.

The Gasol share sale transaction was formally captured in a document, known as a ‘Notice of transfer or transmission of shares,’ filed by Electrogas with the Malta Financial Services Authority on 28 July 2015. 

The document showed that the share transfer was registered with Electrogas on the same day, 22 July 2015.  Mizzi had vehemently denied any connection between the two events, and Prime Minister Joseph Muscat had described it as “hogwash” when questioned by the media on the day of publication.

The next day, 23 July 2015, an FIAU report leaked to this newspaper confirms that money was transferred to the Dubai company, 17 Black, whose function was to transfer money to the Panama companies belonging to Dr Mizzi and another Panamanian company owned by the Prime Minister’s chief of staff Keith Schembri.

The leaked FIAU document reported a transfer of money from a company connected to Armada Floating Gas Services Malta, owners of the LNG tanker berthed in Marsaxlokk, to a Dubai-based company, 17 Black, created for the purpose of transferring kickbacks to then Minister for Energy Konrad Mizzi and the Prime Minister’s Chief of Staff Keith Schembri. The FIAU report categorically states that “a transaction was carried out successfully on 23rd July 2015.”

According to The Times of Malta, reporting through the Daphne Project, another $200,000 (€161,000) payment was sent to 17 Black by Orion Engineering, a company owned by the local agent for the FSU unit feeding LNG to the new power station.   The FIAU also found the $200,000 payment in July 2015 by Orion Engineering to be suspicious, due to Mr Pullicino's links to the power station project.

The newspaper has also reported how the FIAU had traced two payments totalling $1.4 million (€1.1 million) to 17 Black, from a company in the Seychelles called Mayor Trans, which is owned by an Azerbaijani national.  The funds were sent to 17 Black in November 2015, via ABLV, a Latvian bank recently closed down due to money laundering violations.  The payment is now being investigated by the Latvian anti-money laundering authorities.

Gasol was controlled by a Seychelles company with registered office at Mossack Fonseca

On 10 April 2016, The Malta Independent on Sunday revealed that Gasol was controlled by African Gas Development Corporation Limited, a company whose registered office was at Suite 13, First Floor, Oliaji Trade Centre, Francis Rachel Street, Victoria Mahe, Seychelles, which was also the address of Mossack Fonseca in the Seychelles.  In substance, this means that Gasol was effectively controlled from within the offices of Mossack Fonseca.

The Klone Trust

The accounts of Gasol up to 31 March 2015 states that the parent company of African Gas Development Corporation Limited was the Klone Trust, a private company whose ownership or other details are not provided.  The Klone Trust is the ultimate controlling party of Gasol.

The holding of Gasol’s international company structure through a trust is very similar to the other structures revealed to have been adopted by Mossack Fonseca in the Panama Papers.

A matter of accountability and transparency

The 31 March 2015 accounts are the last filed to-date by Gasol with the UK companies register, the website of the latter shows.  The accounts were filed on 12 September 2017 – two-and-a-half years after the yearend to which the accounts relate.  

According to the Companies House website, Gasol’s accounts up to 31 March 2016 were due by 30 September 2016, but they are overdue.  It is understood that the company’s accounts up to 31 March 2017 are also overdue as of today.  Those missing accounts may shed more light on the Electrogas disposal.

The filing history of Gasol shows that the 31 March 2015 accounts were filed almost one month after a first notice for compulsory strike-off in terms of UK companies law had been published on 15 August 2017.  The compulsory strike-off was discontinued on 26 August 2017.

 

  • don't miss