Sanctioned Russian-Maltese firm with deep government ties to hold major compliance conference

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KEY FINDINGS

• The global investment firm known by the brand name Exante is going to host a compliance conference on 15 May.

  Two key individuals behind Exante’s investment empire – Alexey Kirienko and Anatoly Knyazev – were granted Maltese citizenship in 2016 and 2019, respectively. The company is a Russian-Maltese venture.

  Kirienko and Knyazev, along with their colleague Gatis Eglitis, are the major shareholders of the group.

• Given Exante’s distinct history of compliance troubles, the event’s focus marks a reputational turnaround for the company.

  Our analysis shows that, in the past decade, Exante-linked companies have faced a wide range of legal problems involving local regulators and financial crime investigators as well as other similar entities in the US, Estonia, Russia, and Ukraine.

• The company’s directors, Kirienko and Knyazev, share a long history with the Labour Party, forging direct ties with high-ranking former and current members of the government.

  The list includes disgraced former prime minister Joseph Muscat, disgraced former energy minister Konrad Mizzi’s lawyer, former heritage minister Jose’ Herrera, economy minister Silvio Schembri, chair of the Malta Stock Exchange Joseph Portelli, and former president Marie-Louise Coleiro Preca.

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‘Navigating the future of compliance’

Exante’s knack for projecting an image of corporate success is apparent from its social media presence.

The group’s Facebook page is littered with photos of beaming employees at international conferences, posts about numerous awards it received, and a wide range of events that are either organised or sponsored by Exante.

Exante’s line of work involves the use of financial technology (or ‘fintech’) to provide services to customers. In this case, its numerous subsidiaries spread across several countries provide access to investments by acting as brokers through a shared electronic trading platform.

In terms of numbers, Exante’s flexing on social media seems to match its overall financial health. Its latest set of annual accounts for XNT Ltd – its main local company – indicate that shareholders’ equity stood at around €51 million and that it returned to profit after registering a loss in 2022.

Earlier this week, banner adverts on Times of Malta’s front page brought cap.mt’s attention towards Exante’s latest clout-chasing gambit: a compliance conference held in one of Malta’s tallest buildings.

Questions were sent by this website about the appropriateness of Malta’s biggest newspaper advertising a company with a history of legal compliance issues.

These questions remained unanswered by Times of Malta’s commercial arm by publication time. The newspaper’s editor-in-chief Herman Grech forwarded our request for comment to the sales department, noting that “editorial has nothing to do with the commercial side.”

Held at the Mercury Tower’s in-house hotel, Exante describes the event as “a forward-looking experience designed to equip you with the knowledge, tools, and network to lead in a rapidly evolving regulatory world.”

“…this exclusive gathering brings together compliance officers, fintech innovators, legal minds, and top-tier regulators for a day of bold insights and actionable takeaways,” the description continues.

Among those “legal minds” is former heritage minister and criminal lawyer Jose’ Herrera, whose connection with Exante is at least a decade old. The Malta Digital Innovation Authority’s (MDIA) chief of strategy, policy, and governance, Gavril Flores, is also listed among the speakers.

In 2014, Herrera occupied the role of parliamentary secretary for competitiveness and economic growth. A press release from July of that year documents how Herrera lavished praise on Exante at a ‘corporate breakfast seminar’ it had organised.

After failing to get re-elected in Parliament during the last general elections and “retiring” from politics, Herrera successfully helped Exante overturn a €244,679 fine imposed by the Financial Intelligence Analysis Unit (FIAU) on one of its local companies.

The connection with Herrera was one of several which Exante managed to build with the Labour government since its main local company was first registered in Malta in March 2011.

The group’s recent efforts to brush up its compliance reputation and position itself as a key player contrast greatly with its history – especially when considering that the FIAU fine was issued due to failures in compliance with the Prevention of Money Laundering Act and the Prevention of Money Laundering and Funding of Terrorism Regulations.

The judge’s ruling about the FIAU’s fine wasn’t really about Exante itself – it was part of a wave of cases in which financial operators were effectively let off the hook because the way the FIAU imposes fines was initially considered unconstitutional.

Yet again, Herrera represented Exante in a constitutional case in which his clients successfully argued that their fundamental right to a fair hearing was breached because the FIAU’s fine was imposed unilaterally.

In an unconnected case concluded in November of last year, the constitutional court ruled that the fact that any individual or entity that feels aggrieved by any decision taken by the FIAU can seek redress in a court of law automatically means that the right to a fair hearing is not being breached.

Exante’s fraught history

In 2018, The Shift News published a piece titled ‘Who is Alexey Kirienko?’

The newsroom revealed that Kirienko acquired Maltese citizenship in 2016. Anatoly Knyazev acquired citizenship in 2019. Their company was also licensed to sell golden passports.

In its first report about Exante in 2018, the newsroom flagged Exante’s alleged involvement in a massive insider trading ring that leveraged illegal access to newswire data to trade ahead of the market.

The investigation into the ring was carried out by the US Securities and Exchanges Commission (SEC).

While the SEC’s investigation was ongoing in 2015, the Malta Financial Services Authority (MFSA) had launched a money laundering probe of its own.

In February 2016, the SEC case exonerated Exante, though it did charge nine of its customers. The MFSA case was also withdrawn – less than four months prior, in October 2015.

Though Exante’s run-ins with the US’ financial watchdog as well as Malta’s own regulators ended without any further consequences for the group, its operations elsewhere led to actual sanctions – from two countries currently engaged in an ongoing war of aggression.

EXT Ltd (Exante’s Cyprus-based subsidiary) was blacklisted by Russia’s central bank in 2021 over “signs of illegal professional participation in the securities market.” Its authorisation to operate in Russia was revoked shortly thereafter.

At the time, the MFSA told the press that any enforcement related to EXT Ltd’s operations was outside of its jurisdiction, in spite of the fact that the Exante brand is indelibly linked with Malta.

After the outbreak of Russia’s war of aggression, Ukraine’s National Security and Defence Council (NSDC) added EXT Ltd to its list of sanctioned companies.

These sanctions were imposed on entities which Ukraine believes pose a threat to its national security or the rights and freedoms of its citizens.

In 2020, Exante was also embroiled in a fraud case in Estonia involving a now-defunct firm named Envestio.

According to one of the investors who was defrauded, the case in Estonia remains ongoing as of April of this year.

The Estonian fraud case led to a request for information that ended up in local courts.

After a three year legal battle, both the civil court and the court of appeals rejected Exante’s request to refrain from providing this documentation.

During some preliminary research carried out by this website last year, we reached out to Marek Keiman, head of fraud and asset recovery at Magnusson Law’s Estonia bureau. Keiman represents some of the investors who were defrauded by Envestio in a separate case outside of Maltese jurisdiction.

“We sought to obtain documentation related to Envestio from Exante, as millions of euros had been transferred from Envestio’s bank account to its account at XNT Ltd (Exante),” Keiman told this website in February of last year.

“Our goal was to trace these funds and understand the flow of transactions. In our investigation, we acquired account information from Exante. The data revealed that the funds were initially transferred to an account with XMT Gozo Ltd, a company associated with Exante,” Keiman added. XMT Gozo Ltd was struck off last year while the case remained ongoing.

Keiman further explained how XMT Gozo held a provisional license for investment services at the time. The funds that went from Envestio’s bank account to XMT Gozo were transferred in Bitcoin to various crypto wallets.

“These wallets exhibited a pattern consistent with money laundering,” the lawyer emphasised.

Describing the case as “one of the largest crowdfunding frauds in the Baltic region”, Keiman noted that over 2,200 investors in Europe lost money to the Envestio scam.

“Unfortunately, Exante has been very reluctant and hasn’t provided constructive information that could aid Envestio’s bankruptcy process and the asset recovery. While Envestio’s operations were fraudulent, Exante’s activity also raises concerns of malicious conduct. XNT Ltd has given us some documents, but it has been extremely reticent to provide us the full set of documents,” he added.

Connections

Besides its long-standing connection with Jose’ Herrera, Exante can boast of access to other high-profile figures in Maltese politics.

First and foremost among them was disgraced former prime minister Joseph Muscat, who actively promoted the company’s ventures since its inception.

Given the number of photos showing company representatives hosting senior government executives, Exante was evidently at pains to highlight its level of access by regularly posting on social media about it.

 

 

There is at least one known instance in which the political connections fostered by Exante’s top brass overlapped with suspected criminal activity.

According to an exposé published by the Times of Malta last year, disgraced former energy minister Konrad Mizzi’s lawyer, Aron Mifsud Bonnici, was being investigated over a suspicious €1.4 million transfer to XNT Ltd.

In spite of the fact that Mifsud Bonnici’s declared income between 2016 – 2019 amounted to €680,000, payments in his bank account for that same time period amounted to over €2.4 million. The discrepancy triggered a probe into Mifsud Bonnici’s finances.

Both Mifsud Bonnici and Mizzi himself are facing separate corruption and fraud charges in the ongoing hospitals concession case.

Besides its known links with the Labour Party’s top brass, some of Exante’s staff also has direct ties with the government, including by holding multiple roles both within the public and private sector.

Kristina Arbociute joined the FIAU straight from Exante. She remains at the FIAU in the position of senior manager within its supervision unit.

Meanwhile, Kerstin Ancilleri – who now works as Exante’s ‘principal representative’ in Dubai after a stint of being personally in charge of its golden passports programme – also held two directorship posts within government.

She was appointed to Wasteserv’s board in 2020 and then appointed to the Planning Authority’s board in 2021. She remains a member of Wasteserv’s board of directors but is no longer listed as a director at the PA.

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Unanswered questions

Questions sent directly to Exante’s PR team were met with an offer for an in-person interview “at a date and time convenient to both parties.”

We replied by insisting on written answers to our questions due to the time sensitive nature of the investigation while remaining open to the possibility of a separate interview to follow up accordingly.

Those written answers were not received by publication time.

Our questions were as follows:

1) Given Exante’s history of legal troubles (the US SEC, Malta’s FCID and FIAU, ts links with the Envestio fraud case in Estonia, ongoing active sanctions from Ukraine’s National Security Council along with a blacklisting from Russia’s central bank), on what grounds does Exante believe it is qualified to host a compliance conference?

2) Why did two of the company’s key directors, Anatoly Knyazev and Alexei Kirienko, obtain Maltese citizenship? What was the motive? What is the directors’ opinion of the scheme, given the fact that the European Court of Justice has declared it manifestly illegal?

3) Exante’s group of companies has forged direct business ties with former and current high-ranking members of the government, with some of its employees holding multiple roles within the FIAU, the Planning Authority, and WasteServ. Your comment about this can be general, as we have no specific questions about this matter.

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