UPDATED: Hundreds of thousands transferred but no invoices: ‘It was an open agreement’

Keith Schembri has been granted bail against a deposit of €60,000 and a personal guarantee of €90,000 today as the compilation of evidence against four associated with his businesses accused of a number of financial crimes continued.

The others accused in the case are Schembri’s father, Alfio Schembri, Kasco CEO Malcolm Scerri and Robert Zammit, who is Schembri’s accountant. Alfio Schembri was the only one given bail following last week’s hearing. The others were today granted bail on the same conditions as Schembri’s.

Magistrate Donatella Frendo Dimech said they must respect bail conditions which include signing the bail book daily at the police station and staying away from coasts and airfields.

Inspector Ian Camilleri, from the money laundering squad, was the first to testify in today’s continued compilation of evidence against former prime minister Joseph Muscat’s chief of staff, Keith Schembri, revealing more detail about the searches and interrogations involving the accused.

Inspector Camilleri said Schembri told the police that payments to Adrian Hillman, former Managing Director of Allied Newspapers, were paid from abroad as The Times of Malta “would not have liked it” if he was giving consultancy services to Kasco, Schembri’s group of companies. Schembri had also explained that there was an open agreement about services between the two and therefore there was no invoicing between them.

Hillman has not yet been charged. He is facing extradition proceedings. Despite his claims of innocence, he has not returned to Malta to clear his name.

Schembri also told police that Nexia BT director Brian Tonna administered his companies and that Alfio Schembri would hand over cheques to him as ‘donations’ given to his only child. Schembri’s father did not confirm this when questioned.

When the police questioned Malcolm Scerri on the Progress Press deal, he had said that Vince Buhagiar (chairman of Progress Press at the time) had offered his consultancy services as ‘experts’ in the field were needed.

Scerri had also told the police that there were another two offers for the tender and Schembri’s offer was some two or three million less than the others. It has emerged in the previous compilation of evidence that while this deal was ‘cheaper’, some paid out close to €5 million in bribes related to printing machines bought by Progress Press, part of the Allied Group.

Robert Zammit told police that he had always worked on the directions of the persons above him (Scerri and Schembri). He said he had not been working with Kasco for long and therefore did not feel comfortable asking questions.

Kasco would follow the advice of Nexia BT on how money transfers should be made, he said.

When Zammit was asked about the difference between the selling price and the invoicing price of the Progress Press project, the police were told that the price included consumables for the next five years.

The Attorney General’s Office objected to the request for bail today. Schembri’s lawyer, Edward Gatt, argued that the case was “stale, at best”.

Gatt also asked for the conditions regarding the freezing order to be reconsidered by the Court arguing that it does not only affect his client but other individuals too. In her argument against, Mercieca Rizzo reminded the Court that despite the frozen assets, a substantial amount of money was found at his home.

The case will continue on 11 May.

Reporting by Joanna Demarco.