As the US Federal Bureau of Investigation (FBI) delves deeper in its investigation of US President Donald Trump's ties to Russia, it is becoming increasingly likely that the investigation will eventually reach Malta thanks to a web of over a dozen Georgian offshore companies set up in Malta.
The US Department of Justice has tasked former FBI chief Robert Mueller to investigate "any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump," as well as "any matters that arose or may arise directly from the investigation".
In the midst of this investigation, several companies registered in Malta, linked with a Georgian based company called the Silk Road Group could provide some insight into Trump's connections with Russia.
The story centres on plans in 2011 to build a Trump Tower in the seaside city of Batumi in the Republic of Georgia. Adam Davidson from The New Yorker reported extensively on this deal, in which Trump was reportedly paid USD1 million, which involved the financial backing of the Silk Road Group.
The company's indirect links with a Kazakh oligarch, who in turn has direct links to Russian President Vladimir Putin, could provide scope for the probe. Due to the dubious financial dealings related to the company and the direct links to Russia, it is thought that Putin has access to sensitive information related to Trump and the entire deal.
A licence was granted to approve the building of a Trump Tower in Butami, and it was to be developed and financed by subsidiaries of the Silk Road Group. It is reported that the latter received a US$300 million loan from B.T.A Bank, the largest bank in neighbouring Kazakhstan. B.T.A Bank was placed in Kazakh's sovereign-wealth fund, under the directorship of Kazakh oligarch's Nursultan Nazarbayev's son-in-law Timur Kulibayev.
Of interest is that the Kazakh ruling authority has access to the bank's internal files and therefore access to all information related to this deal.
Reports emerged about the Silk Road Group for its complicated and layered financial structure. One former board member from the bank is said to be closely linked with the Silk Road Group, with mounting evidence to suggest that he orchestrated loans to companies he was partially in control of, a practice known as 'self dealing'.
The Malta connection
The corporate structure of the Silk Road Group, which is a holding company that controls dozens of corporate entities registered around the world, involves several holdings in Malta.
The complex layers of shell companies registered in various countries made its way to Malta. The New Yorker cites an eight-million-US-dollar loan granted to Batumi Riviera Holding, BV, which is registered in Holland. Batumi Riviera Holding is then owned by Tbilisi Central Plaza, a company registered in Malta, which is owned by Susalike Holding GmbH, which is registered in Germany, to a Silk Road Group subsidiary.
In addition to this, research carried out by this newspaper reveals that multiple other companies linked with the Silk Road Group are registered in Malta. The Silk Road Group as well as a holding company is registered in Malta, with its shareholders being another Malta registered company called Prometheus Holdings and another fiduciary company called Artio Corporate Services.
The Silk Road Group Holding company is registered as the shareholder of Prometheus, with the former's shareholding made up of other fiduciary companies and a company called SRS Georgia Fund LLC.
The company's complicated structure leads many experts to raise red flags on the lawfulness of its dealings. Those concerned with Russian meddling in the US elections argue that should the Russian government have access to sensitive information such as in this case, were an apparent lack of due diligence on source of funds took place on behalf of the Trump organisation, as this could be used to blackmail the leader.
The lawyer of the Trump administration, Jay Sekulow, has been quoted as saying that the US Justice Department investigation must be as specific as possible, and that it would lodge formal complaints should it delve into Trump's business dealings in Georgia. He contends that Georgia is not Russia; however, opponents stress that Russian influence does not stop at Russian borders.
Malta may yet again have its corporate service provision system come under fire through its links with the Silk Road Group. The Georgian company may well have chosen Malta, among many other jurisdictions, due to country laws allowing nominee shareholding as well as very favourable corporate tax rates.