The Egrant saga risks damaging the financial services sector unless it is resolved swiftly, practitioners in the field have cautioned.
Franco Azzopardi, president of the Malta Institute of Accountants, says that procrastination is unfair on the alleged accused and “citizens who have banked their savings with the confidence they are entitled to as investors”.
Writing in today’s The Sunday Times of Malta, Mr Azzopardi says the saga is “pounding dangerously at the crumple zone” of the economy’s foundations.
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Without entering into the merits of the allegations, he says the affair is putting the country on a radar “we do not want to be on”.
In a passionate plea, Mr Azzopardi calls on regulators to act fast in the name of good governance to ensure that Malta retains its “impeccable reputation”.
“The regulators with the bark and the bite to carry out investigations and sanction action should clear this with agility in the best interest of the Maltese populace. Complacency and decision paralysis is a no go,” he warns.
Mr Azzopardi’s sentiment is reflective of the sentiment of practitioners in the financial services sector, who have traditionally preferred a low-key environment.
A practitioner from one of the major accounting firms, who preferred to remain anonymous, said that controversies like these were not healthy.
He said the financial services sector in Malta has benefitted from political consensus over the years, which now risked being lost.
“When something like this happens, it creates jitters, because people fear that the consensus, which helped the sector flourish, will shatter,” he said.
However, he noted that the most recent saga had not yet prompted enquiries from investors, probably because it was still too early and there were other international factors at play.
“At this stage, there may be other, far more important factors, such as the French and British elections, to worry about, but things could change from one day to the next,” the accountant said.
This more recent saga was sparked by allegations from journalist Daphne Caruana Galizia that Panama company Egrant Inc was owned by the Prime Minister’s wife, Michelle Muscat.
The information also alleged that Egrant and the two other Panama companies held by Minister Konrad Mizzi and Keith Schembri, the Prime Minister’s chief of staff, held bank accounts with Pilatus Bank in Ta’ Xbiex.
Amid allegations that these bank accounts had received suspiciously large sums of money from Azerbaijan, the operations of Pilatus Bank also came under the spotlight. Questions have been raised by the Opposition leader regarding the regulatory process that awarded Pilatus a banking licence in 2015.
All this, including the strenuous denials of those involved and the subsequent magisterial inquiry requested by the Prime Minister, have created a cloud of suspicion that risks putting the whole financial services sector under a harsh spotlight.
kurt.sansone@timesofmalta.com