A financial analysis of Kasco Holdings, owned by the Prime Minister’s chief of staff, Keith Schembri, shows the Group’s audited accounts declare a loss of nearly €700,000 to the Malta Financial Services Authority in the three years following the setting up of two offshore companies.

The losses, incurred in the years 2012 to 2014, follow the establishment of two companies in the secretive jurisdiction of the British Virgin Islands, which was done the previous year. Panama Papers shows that in January 2011, Mr Schembri set up Colson Services Ltd. Another company, Selson Holding Corporation, was set up on the same day and fronted by Malcom Scerri, Kasco’s managing director.

An independent analysis of Kasco’s audited accounts for the years 2009 to 2014 commissioned by The Sunday Times of Malta shows the Group’s gross profit margin fell by 32 per cent in the year the companies were established.

The tax commissioner has already stated that all individuals mentioned in the Panama Papers are under investigation. It is not yet clear whether Prime Minister Joseph Muscat will allow full disclosure of the outcome of this investigation into his chief of staff’s financial affairs.

I confirm once again that I will not discuss commercial information of companies

The financial analysis of Kasco’s audited accounts presented to the MFSA, which holds public information, shows that over the last five years the Group’s gross profit margin stood at 11.2 per cent. Financial advisers who spoke to The Sunday Times of Malta said this “seems to be quite low”.

Mr Schembri’s comment on the analysis conducted by financial advisors was: “I confirm once again that I will not discuss commercial information of companies in which I have relinquished all directorships I held.

“Nevertheless, I must point out that the questions belie basic understanding of company operations, reporting and interpretation thereof.”

The analysis, conducted by an independent financial consulting company, concludes that in the year he established the companies, revenue figures decreased by 18 per cent, as well as a further 14 per cent in the two years that followed.

Yet in what financial advisers described as an “unlikely” situation, the company’s administrative expenses grew by 29 per cent in 2011 and a further 32 per cent from 2013 to 2014.

“With a decrease in revenue figures, one would expect to find a similar decrease in expenses. On the contrary, administrative expenses increased.  Despite a reduction in employees from 46 in 2013 to 31 in 2014, administrative expenses increased by nearly €300,000,” one financial adviser said.

The Prime Minister’s chief of staff did not elaborate. “In the event that... through your reporting, [you] attribute false claims, make incorrect statements or otherwise resort to conjecture or fabrications, even if same conjecture or fabrications were reported in any other news journal whether locally or internationally, I shall take all appropriate legal action.

“All other legal rights pertaining to me personally and those of my companies are hereby reserved”.

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