Fenech and the Bangladeshi Schembri

OPINION: 'As a successful businessman, Yorgen Fenech knew that even the best-laid plans would fail without a greedy collaborator inside the government who was willing to put his own interests above those of the nation'

 

Some countries specialise in technology, others specialise in services. Malta specialises in exporting fraud.

If you want to understand what Yorgen Fenech was up to in Bangladesh, you’ll need to revisit the Roadmap to Their Riches (and Your Ruin).

The wheels started turning in March 2013, just 72 hours after Labour’s election victory.

Of course, it was planned out in detail beforehand. But that’s when Karl Cini of Nexia BT contacted his associates at Mossack Fonseca Panama with a request to open three companies: Tillgate (Keith Schembri), Hearnville (Konrad Mizzi), and Egrant (who do you think?).

The Panama entities were set up as holding companies. They would simply own shares of other companies in the same way you might own investments like stocks or bonds. This way the revenue incurred by those shares would be ‘earned’ by the Panama company rather than the individual who owned it.

Now, when you set up an offshore company — or any company, for that matter — the incorporation documents must list the types of business your new entity will be involved in.

Anti-money laundering laws are very strict about this, even in jurisdictions with lax regulation and enforcement.

Cini told Mossack Fonseca that the secret Panama companies owned by Schembri and Mizzi would hold shares in companies that were active “in the sectors of recycling [and] remote gaming”. Remote gaming refers to online casinos. The recycling business would take place in India, Dubai and other Gulf countries.

You’ll remember Enemalta issued a call for expressions of interest for the power station project one month after those companies were opened.

Electrogas isn’t our focus here. I just want to remind you that they didn’t waste any time starting the main get rich quick scheme — the power station Daphne Caruana Galizia was investigating when she was killed.

Back to Crummy Keith and Konny Kon.

Two months after the government signed the Electrogas agreement, Nexia BT opened New Zealand Trusts for the Toxic Two.

Adding trusts to the equation builds in another layer of secrecy. You no longer legally own assets placed in a family Trust — the Trust does. It’s controlled by a legal ‘trustee’ tasked with looking after those assets on your behalf.

It’s difficult to find out who the real owner of a Trust is if his or her name isn’t on the public record. When Mizzi set up his New Zealand Trust, he ticked boxes on the application marked ‘no audit’ and ‘total secrecy and confidentiality’.

The New Zealand Trusts owned Schembri and Mizzi’s Panama companies, and that kept them at arm’s length from their ultimate beneficial owners.

Okay, those are things you already know. Pause for a second and take a sip of water. Here’s where Fenech’s trip to Dhaka fits in.

Yorgen and his brother Franco flew to Bangladesh in October 2015 — three months after the New Zealand Trusts went live — plastering a trail of photos all over Franco’s Instagram page.

Franco said the visit “exceeded his expectations”. I don’t imagine he was talking about tourist sites in one of the world’s most overcrowded countries.

Two months later, in December, Karl Cini amended Schembri and Mizzi’s Panama company documents to add three more items to the list of business they would be involved in, this time in the Indian subcontinent: infrastructure projects, maritime and fisheries, and tourism.

Quite a broad mix for two guys who were supposed to be very busy running the country. I guess that’s what they call diversifying one’s portfolio.

Cini wasn’t sure if the Toxic Two would be paid through shareholder dividends or straight-up fees. But he knew the main source of incoming funds would be Fenech’s 17 Black and another Dubai company called Macbridge (the owner is so far unknown).

Where would 17 Black get the money to pay the two Maltese government officials?

Fenech’s secret Dubai company was funded by hefty payments from other offshore companies linked to Azerbaijan. We’ve been able to track three of them.

The one we’re interested in for this story is Cifidex, owned by Turab Musayev.

You’ll remember Cifidex was involved in that dodgy wind farm deal in Montenegro. You know, the one inaugurated by Joseph Muscat on his last official trip as prime minister at a time when thousands of people were protesting on the streets for his removal.

It seems Musayev was just a small player before Labour’s 2013 election victory. Back then, he ran a Switzerland-based oil-trading company called SOCAR Trading (STSA) that dealt in Azerbaijani crude. Neither he nor Azerbaijan knew anything about Liquid Natural Gas (LNG) — but they got into the LNG business when Malta chose Electrogas for the new power station.

Under the security of supply contracts that Mizzi signed on behalf of Malta, Musayev’s STSA buys LNG from Shell, who buys it from Trinidad & Tobago and Nigeria. STSA then turns around and sells that same LNG to Electrogas at a $40 million per year markup — and you’re stuck with the deal for years.

Not too shabby for buying LNG with your left hand and reselling it with your right. Most people would be content to stop there.

But that’s the thing about easy money, isn’t it? They get possessed by some sort of gold fever and just end up wanting more.

What if they could replicate the Electrogas scam in a few more countries, as Vitals Global Healthcare did with the hospital takeover?

It turns out this is exactly what Fenech was up to.

Musayev’s company STSA used the ‘successful’ Electrogas project in Malta — a European Union country — to pitch the same scheme to delegations from Qatar, Kenya, Namibia, Ivory Coast and… you guessed it… Bangladesh.

As a successful businessman, Fenech knew that even the best-laid plans would fail without a greedy collaborator inside the government who was willing to put his own interests above those of the nation.

Cue Salman Rahman, a senior advisor to Bangladesh’s prime minister, and co-owner of the Beximco Group, a conglomerate with interests in pharmaceuticals, aquaculture, textiles, ceramics, energy, media and financial services.

It is unclear how these guys hooked up, but what matters is that Bangladesh was conducting a revision of its Energy Master Plan at the time and Rahman was in a position to know the intimate details.

Fenech had found his Bangladeshi Schembri.

By February 2016, Moneybags Fenech was paying a Dutch energy consulting firm to design an “Energy Hub” for Bangladesh that featured a Liquified Petroleum Gas facility and an LNG plant.

The details read like a carbon copy of Electrogas, right down to the “storm mooring” system and the 600-1000 MWh generating capacity. The Dutch company was even promised the project designs from Malta to make copying easier.

By late 2016, the Tumas Group and Rahman’s Beximco were talking joint venture.

Fenech sent Electrogas Director Catherine Halpin an email from Bangladesh asking for photos of Malta’s power station for him and his buddy Musayev to use in their presentation.

And just as sure as Mizzi’s insider-packed Evaluation Committee recommended Electrogas, Bangladesh decided it needed to import LNG to generate power, too.

The Tumas Group and Beximco signed a Memorandum of Understanding (MOU) with the Bangladeshi Ministry for Energy and Petrobangla in February 2017.

It’s not clear what Fenech was supposed to bring to this project beyond the carbon copy plan, or who else would cash in. 17 Black’s links to Azerbaijani money and Schembri’s “draft business plans” suggest he was backed by those in power.

Unfortunately, even copy-and-paste plans can go wrong.

Bangladesh eventually ditched the floating tanker idea, and Rahman cut his Maltese ‘friend’ out of the loop. Even the MOU disappeared.

Rahman tried to go it alone again as recently as July 2019, without any help from the Tumas Group.

I suppose that’s just as well. The accused mastermind of Daphne Caruana Galizia’s murder can’t do much for those guys as long as he’s in the slammer.

If justice prevails, his political associates will join him there, too.

                           
                               
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Natalia
Natalia
10 months ago

Well written, explains all detailes very accurately.

William Farrugia
William Farrugia
10 months ago

I can do much more but as usual your “articles” are just replete with innuendos bordering on the fantastic however entertaining. Something akin of a paperback book you dreamed so much of achieving fame with but clearly failed. So now you think you have found your niche audience.

Malta specialises in exporting fraud. Actually Malta imported what smacks like serious fraud from your home country Canada together with that other oil producing country Azerbaijan and Iran

revisit the Roadmap to Their Riches. Indeed its all you can manage to do. Your lack of creativity is appalling. Nothing but recycling the same shift over and over.

Ill stop here since I know this wont be posted. You are doing a great disservice to the Shift News and what it stands for. Do the honourable thing and go roost somewhere else please. Your sort of spinners are fun for a while but the trend is loss of interest and just another comic. Unfortunately I would see that rub on your other honest colleagues.

William Farrugia
William Farrugia
10 months ago
Reply to  Ryan Murdock

While I appreciate your reply I note you did gloss over my main points of criticism. Of course yours are facts. I did not dispute that. What I’m not happy with is the method of delivery. Your style is attracting the hard core PN crowd. Its helping to reinforce this fallacy that the previous PN administrations were clean. They were not. On the contrary they were just as bad. Karen Grech died of a bomb attack clearly from a PN supporter of some sort. The Swiss leaks came in late but proved a very well known open secret. Hardly credible either Fenech Adami or Gonzi did not know about it. John Dalli was PNs creation and sent to the EU to be rid of him here. John Dalli himself attests to that. And so on and so forth. And this is never going to end even if a PN government is elected.

Why are we not attacking the root of the cause instead of chasing after the symptom? Our institutions are controlled by a central all powerful Prime Minister. Just like the Canadian system except that in Canada the provinces wield almost as much power as the Federal for historical reasons. So it works and the opposition has a good chance to challenge government on a level playing field without resorting to individual populist vote schemes.

For example I am against privatisation but I can see now that Malta’s democracy needs it. Without the state entities and other authorities that can be privatised by listing them on the local stock exchange any party in government would loose the main source of iced buns, cushy jobs state employment.

And they have the cheek to speak of 80s gerrymandering! A few thousand here and there, swapped between them any way as opposed to endless source of jobs supported by taxpayer. And yes PL used the “persons of trust” system to give top high paying cushy jobs to their lackeys but did you ever go check out the hundreds who were promoted at lightning speed some from right at the bottom clerical positions? Thats how PN used to give away high paying cushy jobs. Open a call for a very low level clerk with low annual remuneration. Say five are brought in through some entity. Few would apply. Then jet them straight to the top. Some receiving a promotion every 3 months. Then lend them to the authority you want them to be. Classic case? Norman Vella. Barely educated “Journalist, Production Manager, Producer, Script Writer, Presenter” riding the (in)famous “Where’s everybody bandwagon”. PN slick populist machinery. Another one? Claudio Grech. Straight out of Uni heads the secretariat. Within 8 years and zero private business work experience he is CEO of Smart city.

This is the sort of people you are supporting and this is why Simon Busuttil with all his good intentions failed and why all those coming after him will fail for as long as social memory lasts. They have made the people cynical and not really caring who is corrupt or not. Corruption for the Maltese psyche is just a campaign tool.

These people that are praising your graces you should have understood by now are convinced that their beloved PN is our saviour and the PL is the devil, the enemy that we need to fight off religiously. That’s awful. That’s not the democratic system we should be helping to establish.

How about the whole

And I can prove it. Those that are supporting you so vociferously are the least probable to donate to support you. That’s because the Maltese mind is like that. They will cheer you on but if they are going to make a donation its going to their beloved party cause that’s how they were brought up to think.

That’s exactly the same problem that hurts independents. I hope to see change and we can start with you. If your methods do not change then I’m afraid none of the rest will

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