Labour MP Evarist Bartolo has demanded an inquiry by the prime minister into how the chairman of the Malta Financial Services Authority is a partner in a Cayman Islands company with one of the consultants he appointed for the MFSA.

Speaking in Parliament last night, Mr Bartolo said he was concerned about relationships between the chairman of the MFSA, Prof Joseph Bannister and interests in the Cayman Islands.

He noted that since 2008 the MFSA had paid over €3m in consultancy services, always awarded by direct order in breach of public procedures. Some people were paid €1,000 per hour, although this might be justified in some cases in this sector.

His question, Mr Bartolo said, was whether all the consultants were being appointed with an eye to benefit Malta and its financial centre. The financial centre, he said, had many competent people, but some were sad

over some aspects of management.

He noted that the Financial Services Authority in the UK had removed a person, Clive Briault, who was responsible for surveillance of Northern Rock Bank but had been found guilty of systematic failure of duty.  And then this same person was awarded a contract by direct order for consultancy services in Malta and has so far been paid more than €500,000. The contract was awarded by Mr Bannister.

Questions also had to be asked on the repeated appointment of other consultants such as Piero Ugolini and Anthony Fisher. What were the returns for Malta?

What was even more worrying was that among the consultants appointed by direct order by the MFSA, there was one who operated in partnership with the chairman of the MFSA in funds grouped under a large company in the Cayman Islands. This was the same place, Mr Bartolo said, where HSBC allegedly allowed a subsidiary to launder drug runners’ money.

Shouldn’t it be worrying, Mr Bartolo asked, that the chairman of the MFSA was partner with one of the consultants he appointed by direct order, in a big company with huge assets and branches in Italy, Germany and the UK?

This consultant had so far been paid more than €460,000 by the MFSA. Was this a conflict of interest? Did the prime minister know that the chairman of the MFSA was partner with a consultant he appointed by direct order in a company in the Cayman Islands, with the reputation that it had?

Wasn’t he endangering the reputation of Malta’s financial services centre.

It was important, Mr Bartolo said, that the prime minister, as the person who appointed Mr Bannister to investigate his involvement in the Cayman Islands and whether it amounted to a conflict of interest. Certainly, the provisions of conflict of interest which applied to all workers of the MFSA should also apply to the chairman.

For more on this story go to:

http://www.timesofmalta.com/articles/view/20121114/local/pm-asked-to-investigate-mfsa-chairman-s-link-to-cayman-islands-company-consultant.445252