Alan Kentish, the chief executive of the London-listed, Gibraltar-headquartered STM Group, was arrested more than a week ago for allegedly failing to disclose information to Gibraltar’s authorities about a client who had been involved in a tax dispute between two jurisdictions, the company said today.
In a statement to the London Stock Exchange, STM Group didn’t name the client, but said the matter involved a dispute that took place between 2008 and 2013, and concerned Kentish’s role “as a professional director of a client company of STM”.
It said that although the police had yet to conclude their investigation of the matter, “the advice received by Mr Kentish and by STM is that the allegations have no merit”.
The company ends its statement by noting that it is “currently reviewing where its head office should be, given its operational requirements”, and noting that it now has administrative offices in the UK, Malta, Jersey, Spain and Gibraltar.
As reported, STM Group acquired UK SIPP provider London & Colonial in 2016.
Tax dispute involving client
In its statement, STM said the matter began in November 2015, when “the ultimate beneficial owner of the client [company], who has been a client of STM’s for over 15 years, became involved in a tax dispute between two countries for the years 2008 to 2013, over their respective taxing rights to the taxes correctly paid by him”.
“At that time and until it was clear that the issue was a tax dispute, Mr Kentish followed compliance procedures in filing two relevant Suspicious Activity Reports (SARs) with STM’s Money Laundering Reporting Officer (MLRO), both of which were externalized by the MLRO to the Gibraltar Financial Intelligence Unit (GFIU).
“Under current Gibraltar legislation, the GFIU must respond within fourteen days if it wishes to direct any action to be taken, with a lack of response from the GFIU being acceptance by them for STM to continue as normal. No such response was received by STM’s MLRO.
“On Thursday 19 October 2017, approximately two years since the two SARs were filed, Mr Kentish was arrested by the Royal Gibraltar Police (RGP) on the allegation of failure to disclose under the Proceeds of Crime Act 2015.”
Given that the company had been advised the allegations against Kentish lacked merit, the statement went on, “the board of STM is fully supportive of Mr Kentish’s actions in relation to this matter.
“Furthermore, the Board of STM is profoundly disappointed with the current situation and is confident the matter will be resolved in Mr Kentish’s favour in the very near future.”
STM is a major provider of overseas pensions and other financial service products to professional intermediaries, in addition to handing administration of assets for international clients in relation to retirement, estate and succession planning and wealth structuring.
The Group has said that it is looking to expand through the development of additional products and services.
The STM Group shares initially fell almost 2% in early trading today, to 50p, but recovered and around 11am were at around 54p, an increase of around 5.8% from their opening of 51p a share.