Maltese companies transferred to New Zealand in bid to hide Azerbaijan cash trail

An Australian business man transferred the ownership of Maltese registered companies to New Zealand in an attempt to hide links to the Azerbaijani ruling family, the Australian Financial Review reported.

“Days after the murder of Maltese journalist Daphne Caruana Galizia last October, an Australian businessman transferred ownership of Malta companies worth hundreds of millions of dollars to New Zealand – a move that effectively hid links to the family of the president of Azerbaijan,” the report said.

Last week, The Shift News reported that Pilatus Bank transferred over half the funds held by the bank since assassinated journalist Daphne Caruana Galizia started her revelations on its operations, but it is not clear where the amounts went.

The New Zealand transfers, signed by Australian financial executive Kenneth Ross Hetherington, came after the European Banking Authority opened a probe into Pilatus Bank in November.

Since then, the owner of Pilatus Bank Ali Sadr has been arrested on charges that he evaded US economic sanctions against Iran and his lawyers told a New York court that Pilatus Bank will be closed down.

New Zealand financial consultants who spoke to The Australian Financial Review were puzzled by the decision to create new holding companies in New Zealand for companies in Malta which were already largely tax-free.

The move appears to have obscured the identity of the beneficiaries behind dozens of Pilatus Bank accounts, and in comments to the Australian Financial Review Hetherington said he could not provide confidential client information but “any suggestion that I have been directly or indirectly involved in any action to avoid European Banking Authority surveillance or for any other unlawful or improper purpose is entirely incorrect”.

Revelations on account holders at Pilatus Bank showed the bank’s clients are predominantly politically-exposed persons (PEPs) from Azerbaijan, including President Aliyev’s two children and his minister for emergency situations Kamaleddin Heydarov.

Azerbaijani oligarchs consider Malta to be “one of its provinces” according to an extensive report into how the South Caucasus nation uses “caviar diplomacy” to buy the influence of Western politicians.

Caruana Galizia collaborated with the Australian Financial Review in April 2016 after it was revealed that Maltese minister Konrad Mizzi, and the prime minister’s chief of staff, Keith Schembri, owned two secret Panama companies which were in turn owned by two New Zealand offshore trusts.

Pilatus Bank is at the centre of a number of scandals involving Maltese and Azerbaijani political figures and the Daphne Project revealed that members of Azerbaijan’s ruling elite have used Pilatus Bank to move millions into Europe and invest in a variety of businesses across the continent.

According to the Daphne Project, a network of up to 50 companies, holding some 60 accounts and a majority of the bank’s €250 million deposits, were opened for the children of senior political figures in Azerbaijan that have been used to invest in property, hotels and businesses in Europe.

Last year, Caruana Galizia published documents showing the Prime Minister’s wife, Michelle Muscat, was the owner of Panama company Egrant that held a bank account at Pilatus and received $1 million from Azerbaijan.

The bank has also been linked to money laundering allegations involving the prime minister’s chief of staff, Keith Schembri, who has admitted to having an account at the bank, as did tourism minister Konrad Mizzi. These allegations have been denied by Muscat and his aides but a number of magisterial inquiries are ongoing.