The Malta Financial Services Authority (MFSA) had no reason to doubt the registration of companies by accountant Joe Sammut because all documents submitted to the registrar were authenticated by Mr Sammut himself, the authority informed this newsroom.
On Tuesday, accountant Joe Sammut was charged with fraud, misappropriation of funds, money laundering and the falsification of documents. Mr Sammut has allegedly helped several hundreds of Libyans set up companies in Malta in order to obtain residency permits using fraudulent means, against fees of up to €7,500.
In comments to The Malta Independent, a spokesperson for MFSA said that the authority did not have any indication that the documents presented to the Registry of Companies were forged and such allegation would have been established by a court of law. “Mr Sammut, who is a registered auditor holding a valid warrant issued under the Accountancy Profession Act, authenticated all documents submitted to the Registry. We accept such documentation in good faith and have to rely on the correctness and professionalism of company practitioners who are in possession of a warrant issued by professional bodies, such as the Accountancy Board,” he said.
The companies were registered in line with the requirements and procedures set out in the Companies Act, clarifying the shareholders and duly appointed directors. The appropriate registration fee was paid and in turn, a certificate of registration was issued.
Only companies carrying out activities within the financial services sector are subject to MFSA due diligence and oversight. The companies registered by Mr Sammut are normal trading companies, and therefore are not regulated by the MFSA. “The Registrar of Companies does not have a legal duty to carry out due in respect of company shareholders or company officers. On the other hand, company practitioners are obliged to carry out due diligence procedures in terms of anti-money laundering legislation,” the spokesperson said.
No wrongdoing by MFSA employees
The MFSA spokesperson stressed that there is no evidence of wrongdoing on the part of the employees at the Registry of Companies, because these have carried out their duties correctly in full adherence to the Companies Act.
The MFSA registers over 5,000 companies each year, of which 70% have non-residents shareholders. The registration of a company does not give its non-resident directors or shareholders a right to a work permit in Malta. It is alleged that most of the registered companies did not invest or trade in Malta, however MFSA does not yet have that information, given the companies were registered recently. Such information would be submitted with the company’s yearly accounts. There is no obligation for registered companies to deposit funds in Malta.
It is understood that in this purported scam, foreign nationals are able to gain residency permits when investing at least €100, 000 in a new company. However no such amount is invested and counterfeit receipts and invoices were being presented to justify the issuing of a permit.
Mr Sammut has become somewhat a household name among businessman in Libya and sources have described queues of Libyans at his office in Mosta. It is alleged that businessmen are being escorted out of the airport with customs officials turning a blind eye on false money declarations.
Within a matter of days, Mr Sammut’s office registers a new company with MFSA and presents the documentation to Identity Malta’s residence permit office.
Identity Malta has failed to reply to specific questions by this newspaper.