Fenech 'did not know' of tax fraud investigation involving George Farrugia before pardon was granted

Finance Minister Tonio Fenech said this evening that he did not know that the Tax Compliance Unit was investigating Aikon Ltd, a company in which George Farrugia was one of the main shareholders, until he received e-mails from The Times with questions on the oil procurement scandal.

George Farrugia.George Farrugia.

Speaking at a press conference, Mr Fenech said he did not know about the investigation before Mr Farrugia was granted the presidential pardon for information on the oil procurement case, on February 8. He learnt of the investigation on February 13.

The pardon, he stressed, does not cover any tax fraud, if it results.

He said the investigation is in an advanced stage, but had been widened to include all companies which Aikon had traded with.

Mr Fenech said the head of the Security Service had, in August 2011, requested the Finance Ministry to ask the Tax Compliance Unit to investigate Aikon Ltd. Documents covering the period 2004-2010 were handed by the head of the Security Service to the Ministry's head of Secretariat, who immediately passed them on to the TCU.

The head of secretariat did not see the documents, nor did he inform the minister about them.

The ministry was only the messenger between the Security Service and the Tax Compliance Unit
- Tonio Fenech

"The ministry was only the messenger," Mr Fenech said, although he added that this was the first time in his nine years as parliamentary secretary and minister that he had come across a case when the head of the Security Service had requested the investigation.

He noted that both the head of the Security Service and the TCU were covered by legislation which meant they were not answerable to the Finance Ministry.

He, therefore, was not informed of the specifics of the investigation, or the amounts possibly involved.

Mr Fenech said he never met Mr Farrugia and the name did not ring a bell when the presidential pardon was discussed. He noted that Aikon had passed completely into Mr Farrugia's hands after 2010.

The minister said the investigation included a Swiss bank account. The investigation, he said, had taken some time because at the time when it started, Maltese and Swiss regulators did not have the arrangements in place to exchange information on tax matters, a situation which had since changed.

Should any tax fraud result, all due taxes and penalties would have to be paid, he said.




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