The legal representatives of the Panama Papers-linked Brian Tonna, Karl Cini, Nexia BT and its related companies have strongly denied that bank references drawn up for the Prime Minister’s Chief of Staff Keith Schembri and his business associate Malcolm Scerri were fraudulent in nature.

In fact, according to lawyer Aaron Mifsud Bonnici, the situation could be down to the bank having used the wrong stationary when it issued the information notes.

On Friday allegations emerged to the effect that two HSBC Malta ‘information report’ documents with respect to Mr Schembri and Mr Scerri, which were apparently requested by BTI Management Ltd, a company owned by Nexia BT Holdings Ltd, were fraudulent and that they had not been drawn up by the bank itself. 

This newsroom reported the allegations on Sunday, after sources later confirmed that the bank was expected to investigate the allegations.

This morning, legal representatives for Brian Tonna (top), Karl Cini (above), Nexia BT and its related companies demanded “an immediate retraction and apology” to the article, to be published by 2pm today, and with the article’s language agreed upon by all parties by 12 noon - short of which legal action would be taken against this newsroom.

This newsroom, however, is not in a position to provide any such “retraction and apology”, at least not until HSBC Bank Malta provides an explanation to the allegations that its name had been fraudulently used for the creation of allegedly bogus ‘information notes’, the details of which are explained further on.

In its correspondence with this newsroom this morning, lawyer Aaron Mifsud Bonnici suggested that “the bank may have used incorrect stationery”, which could explain why the information reports appeared to have been false.

Dr Mifsud Bonnici explains, “My clients deny, in the strongest possible terms, that the documents referred to were ‘fraudulent’. The documents in question were issued by HSBC Bank Malta plc in the normal course of business as will be proved if necessary.

“The fact that the bank may have used incorrect stationery could legitimately have been questioned, but to infer from that, as you have done, that the documents were fraudulently fabricated is very clearly libellous and particularly harmful to my clients, given that they are professionals, for whom reputation is paramount.”

This newsroom must clarify that there is a distinct difference between making an allegation and reporting that an allegation will be investigated, as this newsroom had done - a nuance that is apparently being missed by Dr Mifsud Bonnici.

The issue began when journalist Daphne Caruana Galizia on Friday reported how two ‘information reports’ regarding Mr Schembri and Mr Scerri had been dated 27 May 2013, but that she had been “informed by people who work at the bank that the Attard branch had closed more than a year earlier – in February 2012 – and was then already no more than an unmanned automated office”.

For the sake of accuracy, what this newsroom reported was that the bank was expected to investigate the allegations being made.

Contacted yesterday, HSBC Bank Malta would not comment on the state of affairs, or on the state of the investigation into the allegations.

A bank spokesperson would only say: “HSBC Bank Malta's policy is not to comment publicly on individual customers' accounts and relationships.”

On Sunday night this newsroom had received a similar threat from the legal representation of Mr Schembri and Mr Scerri, demanding an apology and a retraction of the story, with the offer having remained open until noon yesterday, short of which legal action would be taken against this newsroom.  This newsroom has, as in the case above, not acceded to any such request.

The information reports in question were required as part of a business transaction involving British Virgin Island companies owned by Mr Schembri and Mr Scerri, some two months after the 2013 general election.

This included the Mossack Fonseca-owned ATC Administrators Inc taking 50,000 shares in both companies, as well as both Mr Schembri and Mr Scerri removing themselves as the sole shareholders and the sole directors of the companies, while appointing persons associated with Mossack Fonseca as directors. Nexia BT’s Brian Tonna and Karl Cini were also granted power of attorney over the companies by both of the new directors.

In addition, Mr Schembri and Mr Scerri had signed documents indemnifying Mossack Fonseca of all costs and expenses in relation to the company. Brian Tonna also wrote and sent letters of reference for both Schembri and Scerri to Mossack Fonseca.

The information reports cited were required to serve as further reference for Mossack Fonseca on Mr Schembri and Mr Scerri’s behalf.

Under the HSBC document’s ‘general comments,’ on the information note, it is stated that Mr Schembri: “is known to us for a number of years as honest and trustworthy and unlikely to enter into commitments he would be unable to fulfil. Highly esteemed in his business circles. Considered to be a good business relationship.” The same was said of Mr Scerri in a separate document.