Around 120 Maltese investors who lost over €6 million in a failed Denmark-based currency trading scheme will have to wait four months for an investigation into the fraudulent affairs of the chief executive to be finalised, Andre Micallef, managing director of local intermediary MFSP Financial, told The Times Business yesterday. In a statement yesterday, the Malta Financial Services Authority confirmed it had been carrying out the necessary enquiries with Msida-based MFSP over the past few weeks.

The regulator said it had taken steps to ensure that both the authority and Maltese who had transferred funds to EURUS Safe Fund Account 2009 1 A/S, promoted by CECA Invest, were kept updated with developments relating to bankruptcy procedures initiated against promoter Per Norgaard.

“The authority has exchanged communication with the Danish financial regulator and with the official liquidator of the bankruptcy estate of Mr Norgaard, and is currently in direct contact with the liquidator, also to assist to the extent possible, in the process of identifying and safeguarding all assets pertaining to Mr Norgaard, which include a number of Maltese registered companies,” the MFSA said in a statement.

“The authority shall continue to monitor developments in the best interests of the affected Maltese persons.”

State broadcaster PBS on Monday reported that scores of Maltese had invested around 50 million krone in CECA, a private Danish company with various investment arms.

Mr Norgaard is under investigation by authorities over the failure of the fund which the Danish press has likened to a Ponzi scheme. Reports claim funds were not invested according to the prospectus and served, instead, to support dividend payouts until the scheme was declared bankrupt at the end of last year.

Over €14 million has been lost in total, half of which belonged to Maltese investors. PBS said investors had been promised returns of 15 per cent.

Mr Micallef yesterday insisted it was too early to jump to conclusions and said that the Danish authorities were dealing with a case of fraud.

All existing investors had been regularly updated with information since December when MFSP Financial initiated legal proceedings, footing a €55,000 bill on behalf of its clients.

Mr Micallef explained EURUS traded in euro and US dollar and all quarterly dividends in the investment period since September 2009 had been received regularly. MFSP also held investments in the scheme which was licensed by the Danish regulator. Last November, however, MFSP became suspicious when delays were encountered in dividend payouts.

Martin Gras Lind, a top Danish lawyer, was engaged to look into Mr Norgaard’s affairs. His findings were handed over to Danish police and a civil bankruptcy petition was initiated against Mr Norgaard and his company.

Mr Micallef said Per Norgaard had admitted in court that hehad falsified and misrepresen-ted company and auditor re-ports.

On February 11, the Danish courts appointed trustee (or ‘curator’) Lars Bentsen to bring to light assets held by Mr Norgaard and hold them in trust. Once the procedure is finalised – which Mr Micallef said would take about four months – Mr Bentsen will be able to establish the value of a list of assets to be liquidated that includes property and cars.

“It is very difficult at this stage in the research to give any sort of indication of what will be recovered,” Mr Micallef added. “These were private investments and a number of other companies have been identified in which Mr Norgaard had a shareholding.

“It is not the scheme which went wrong. What was wrong was the fraudulent decision of the chief executive who, without informing anyone, decided to invest the proceeds somewhere else. He was investing money elsewhere and managed to give the impression for a while that everything was in order by continuing to pay out dividends.”

Mr Micallef said MFSP stopped transferring funds to the scheme in February 2010 as the intermediary felt that in terms of portfolio management “it was enough of an exposure for this kind of scheme”.

Mr Micallef said his company felt the least it could do was foot the legal bill at this stage so as not to burden local investors further.

“Our position is very clear,” Mr Micallef insisted. “We always acted in good faith and we carried out all the due diligence which was required. We visited the institution quarterly for updates and to meet the traders. The MFSA is fully aware of developments and we are working hand in hand with the authorities to help the trustees help the investors.”