News • January 11 2004

Parmalat scandal

Malta’s name in the rubbish bin
Newspapers sure that Malta was at centre of the money trail

Julian Manduca reporting

While the Malta Financial Services Authority sticks to its guns, and claims that "there is no reason why Malta should suffer any reputational risk," with the Parmalat scandal, Malta’s name has been dirtied the world over in the Parmalat scandal that has taken the business world by storm.
Several influential newspapers and TV stations world-wide portrayed Malta as a tax haven or a country with offshore companies. While some media including The Economist, Time and Newsweek, Germany’s Der Speigel have avoided implicating Malta, a plethora of other TV stations, newspapers and websites have tarnished Malta’s name, even if there is not one shred of concrete evidence that Malta was involved in anything illegal.
Significantly, when Time magazine mentioned tax havens it suggested the Cayman Islands and Luxembourg and, contrary to most other reports, left Malta out.
Most of the bad mouthing of Malta has understandably appeared in the Italian media including Rai and the influential La Republica and Corriere della Sera.
Already on 24 December in the Corriere it was noted: "Within an almost infinite network of offshore companies domiciled in the different fiscal paradises (Malta, Cayman, the Dutch Antilles, Luxembourg, British Virgin Islands, Ireland, and Uruguay) all under the umbrella of the Parmalat group, there was the embarrassment of choice as to the possibilities of making money disappear."
On 3 January, more seriously, the Corriere claimed that: "After two weeks of investigations, Magistrates and financiers have located the first slice of the presumed missing funds of Parmalat between Malta, the US and South America: deposits, which according to the accusation were effected "also in 2003" and resulted in the drying up of the Parmalat companies."
La Republica, as was the case with several other newspapers, saw Parmalat Capital Finance Ltd, a company registered in Malta, as being at the centre of the scandal and, January 4, claimed that the Italian magistrature has established that the Parmalat subsidiary Bonlat, drained money from Parmalat Capital Finance Limited, the company registered in Malta in April of 2002.
According to the same article "on its part Parmalat Capital Finance Limited distributed funds to the other Parmalat subsidiaries draining a good part of Parmalat’s liquidity."
The ‘English’ Lebanese paper Monday Morning also distributed in Syria had an article claiming: "The press is trying to unravel a multitude of payments between shell companies in offshore tax shelters such as Malta, the Cayman Islands or Dutch Antilles, or elsewhere in Europe and the United States."
The web based Chanelnewsasia reported: "Investigators reportedly were expected to probe Deutsche Bank capital transfers between South America, the Cayman Islands, the eastern US state of Delaware, Luxembourg and Malta."
Newscom of Australia had exactly the same quote.
The News International of Pakistan reported: "Investigators reportedly were expected to probe Deutsche Bank capital transfers between South America, the Cayman Islands, the eastern US state of Delaware, Luxembourg and Malta."
Similar articles appeared in The Guardian and the Daily Telegraph.
Asked whether the stories in the international media were affecting Malta’s reputation by implying Malta was a tax haven Malta Financial Services Authority chairman Prof. Joe Bannister told MaltaToday the question was neither here nor there, and added: "Malta seeks to offer a variety of advantages including its EU compatible company law framework which since 1965 has followed the UK company law model."