Fi­nance Min­is­ter dodges ques­tions on Hen­ley’s sales of govern­ment stocks and bonds

Malta Independent - - NEWS -

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.

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