Finance Minister dodges questions on Henley’s sales of government stocks and bonds
Finance Minister Edward Scicluna yesterday evening dodged a PN MP’s questions in Parliament on the apparent way in which Henley and Partners was being allowed to act as a stockbroker without a license and was also being allowed to receive a commission of 4% on government stocks – over ten times more than what licensed stockbrokers earn.
The revelation that the IIP concessionaire was receiving the 4% commission – on top of the 4% it receives from the sale of Maltese citizenship – was made in the IIP Regulator’s report last week.
The sale of at least €150,000 in government stocks is mandatory alongside the purchase of a property worth a minimum of €350,000 or rent of a minimum of €15,000 per year. Stockbrokers usually earn around 0.3% on the sale of government stocks.
The government has been accused of letting Henley break the country’s financial services laws but the Finance Ministry has so far remained silent on the issue. Parliament was yesterday debating the Act on the Prevention of Abuse in the Financial Markets.
Opposition spokesperson on financial services Kristy Debono called on the Finance Minister to state why Henley and Partners was being allowed to act as an unlicensed stockbroker and why it was being given “preferential” treatment by the government. Mrs Debono said the Finance Minister should say whether this information was true.
“Our country has clear rules and regulations for financial services intermediaries. Why is Henley and Partners acting as a stockbroker without license? Why is it getting a preferential rate that is much higher to what licensed stockbrokers receive? Government bonds are almost always oversubscribed, so why is the government giving this preferential treatment to Henley. Is this fair?”
Mrs Debono said this was leading to doubts about the sector – it seemed that the regulator was being strict with some operators but very lax with others.
“The Minister should walk the talk and clarify the situation. It is useless for us to come here to draft and approve laws, including on the financial sector, when these are not implemented or enforced as they should be. There is a big difference between theory and practice.”
The PN MP added: “Let us not play with fire and go into unnecessary controversies and damage this sector which is a primary economic motor.”
Mrs Debono also called on the Minster to ensure that the Financial Intelligence Analysis Unit had a new head. Former Director Manfred Galdes resigned in August and has still not been replaced.
Closing the debate, the Finance Minister referred to a number of issues raised earlier during the debate and also answered questions about the FIAU chief but completely evaded the questions on Henley and Partners.
On the FIAU issue Professor Scicluna said: “This is not my personal department and I cannot impose any deadlines on it. I also look forward to the appointment of a new director but that has not happened yet. I am informed that the first round of interviews has just been completed. This will be followed by another round. In the meantime there is an acting director and work is ongoing.”
Earlier in the debate the Finance Minister said the government will amend the law to allow Islamic Finance institutions to be listed on the stock exchange.
Professor Scicluna said that with over 20 million Muslims living in Europe the sector has great potential.
He also said that the law introduced harsher penalties for operators who gave bad advice on investments.