Exclusive: In Daphne murder investigation, money trail leads to Montenegro venture

By Stephen Gray and Jacob Borg
VALLETTA (Reuters) - In the months before her murder in 2017, Maltese journalist Daphne Caruana Galizia was on the trail of an offshore company called 17 Black Limited.
She did not know who owned the company registered in the United Arab Emirates. But she was sure that it was set up to make corrupt payments to her country's leaders, she wrote on her blog without providing any evidence.
Caruana Galizia was killed in a car bomb attack in October 2017.
Last year, the police accused one of Malta's richest businessmen, Yorgen Fenech, who had previously been exposed by Reuters as the owner of 17 Black, from ordering their murder. He denies the charges. The attack triggered a political crisis in Malta, which Prime Minister Joseph Muscat pushed out of office earlier this year.
17 Black's activities have remained puzzling. But now new evidence uncovered by Reuters and the Times of Malta is shedding light on their operations through a particular deal.
In December 2015, 17 Black had a previously undisclosed profit of 4.6 million euros when Malta's state-owned energy company Enemalta bought a wind farm in Montenegro. The purchase was made after negotiations and several trips to Montenegro under the leadership of the then Maltese energy minister Konrad Mizzi.
In the same month, Mizzi accountants and Prime Minister Keith Schembri's chief of staff at the time wrote in an email that Schembri and Mizzi would receive 17 Black's payments for unspecified services. Reuters and other news agencies have previously reported these emails, which were part of an application to open bank accounts for Panama companies owned by the two men.
In April 2018, Schembri confirmed to Reuters that the companies he owned had drawn up a "draft business plan" with 17 Black that was not implemented, but released no further details. He is currently under investigation for possible involvement in the murder of Caruana Galizia, the police said. He has denied any role in the murder of the journalist.
Mizzi previously stated that he had no involvement or knowledge of the conspiracy to murder Caruana Galizia.
He told Reuters that he was not connected to 17 Black and denied that "an email from my service provider said I could benefit from the company." When asked about his travels to Montenegro, Mizzi replied: "As Minister for Enemalta, I was involved in this project and determined the overall energy policy." He said he had no role in corrupt business.
Reuters found no evidence that 17 Black made the payments to Schembri and Mizzi.

MONTENEGRO VENTURE
The Montenegrin Mozura wind farm project was launched in 2010 as the first major renewable energy program in the Balkan state. A license to build and operate the wind farm was won by a Spanish company, Fersa Renovables, which merged with another Spanish company, Audax Renovables.
In November 2015, the Maltese government announced that the state-controlled Enemalta was acquiring the project.
However, reports and company records in Montenegro published by Fersa showed that Fersa sold its 99% stake in Mozura to an intermediary, a Seychelles-registered company called Cifidex Ltd. The remaining 1% of the shares held by a local Montenegrin company were also sold to Cifidex.
According to public records, Cifidex bought the Mozura shares on December 10, 2015 for 2.9 million euros ($ 3.3 million). Two weeks later, Cifidex sold all of the shares to Enemalta. Enemalta stated in its accounts that it had paid EUR 10.3 million - more than three times the original price.
Ownership of Cifidex and the extent of the profit, including any additional fees incurred through the intermediation of the business, have not been disclosed in public records. Reuters was also unable to determine how or why Cifidex was involved in the sale. The company could not be reached for comment.
Audax declined to provide Reuters with details of the ownership or representation of Cifidex, and stated in a statement that "no personal or personal information can be provided." Audax said it sold the wind farm because it was "not strategic". The Montenegrin company with a share of one percent did not comment on the deal. Enemalta said it would answer questions as soon as possible once the information was "collected and verified". At the time of publication, Enemalta had provided no further details on the wind farm transaction.
Sources directly involved in the transaction told Reuters how it was structured: Cifidex bought the Fersa shares for € 3m that 17 Black borrowed. After Cifidex sold the shares to Enemalta, it paid back the 3 million euros to 17 Black, plus an additional "profit sharing" of 4.6 million euros ($ 5 million). Reuters could not determine what 17 Black was doing with this win.
Two other people with access to information about 17 Black's bank account in Dubai confirmed to Reuters that 17 Black transferred € 3 million to Cifidex at the end of November 2015. Cifidex paid a total of EUR 7.8 million to 17 Black by May of the following year. A third source showed a lower value of 7.6 million euros.
Cifidex is owned by a person with direct knowledge, Turab Musayev, a senior executive at SOCAR Trading, the Swiss-based subsidiary of Azerbaijan's state-owned oil company SOCAR.
Musayev, who has a British passport, was a business partner of Fenech, the owner of 17 Black. The two men were co-directors of a consortium that built a 450 million euro gas power plant in Malta in 2017. Musayev represented SOCAR Trading, which, according to public records, owned a third of the consortium.
The UK-based Musayev law firm Atkins Thomson said Musayev had no reason to avoid doing business with Fenech. "As you can imagine, our client knew nothing, had no idea, and had no reason to believe that Mr. Fenech was involved in the atrocity," the law firm said in a letter to Reuters.
The letter added that "all of the business relationships our client had with him included due diligence by other very reputable and established companies, including bankers, professional accountants and lawyers."
Cifidex has its own independent management, the letter said. It did not directly address Musayev's ownership of Cifidex or answered questions about his role in the Mozura deal. Another letter clarified that Musayev "had nothing else to do with Mr. Fenech beyond the Mozura transaction".
Fenech, who is in pre-trial detention while the homicide hearings continue, did not answer questions asked about his lawyers about the wind farm. A lawyer said Fenech did not want to comment on the matter yet.
SOCAR Trading informed Reuters that it had no involvement or knowledge of the Mozura system and no knowledge of 17 Black. In a statement, the company said it hired Musayev as a consultant "to enable him to do business outside of his official duties." SOCAR confirmed that Musayev was appointed director of the energy project consortium, where he worked alongside Fenech.
Reuters asked Schembri, Mizzi and former Prime Minister Muscat if they knew that Musayev, 17 Black or Fenech were involved in the wind farm project. Mizzi and Muscat said they were not aware of this. Schembri didn't answer. Muscat, who opened the completed wind farm project in November 2019 shortly before leaving office, said in a statement: "My role was to promote relations with the government of Montenegro at presidential and premier level, as well as my duty as prime minister." He said that Schembri, as far as he knew, was not involved in the negotiations for the project.
((Reporting by Stephen Gray and Jacob Borg of the Times of Malta, additional reporting by Isla Binnie in Barcelona, ​​editing by Janet McBride))

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