Self-invested personal pension (Sipp) provider STM Group chief executive Alan Kentish has been arrested in Gibraltar over allegations of failure to disclose information over a tax dispute involving a client.
The financial services company said in a market notice that an identified STM client has been involved in a dispute between two countries, between 2008 to 2013, over their respective taxing rights to the taxes correctly paid by him.
Until it was clear that the issue was a tax dispute, Mr Kentish followed compliance procedures in filing two relevant suspicious activity reports (SARs), which were externalized to the Gibraltar Financial Intelligence Unit (GFIU), the company said.
Under current Gibraltar legislation, the GFIU must respond within 14 days if it wishes to direct any action to be taken.
A lack of response was understood by STM to mean to continue as normal, the firm added.
But on 19 October, Mr Kentish was arrested by the Royal Gibraltar Police (RGP) on the allegation of failure to disclose under the Proceeds of Crime Act 2015.
While the police have yet to conclude on the investigation, the advice received by Mr Kentish and by STM is that the allegations have no merit, the company said.
STM’s board stated they are fully supportive of Mr Kentish's actions in relation to this matter.
The board stated: “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.”
Last October, STM completed the acquisition of pension provider London & Colonial, which had a Sipp business with approximately 2,000 members and a turnover of approximately £1m.
STM has administrative offices in the UK, Malta, Jersey, Spain and Gibraltar, with its head office based in Gibraltar.
However, it is currently reviewing the location of its head office, given its operational requirements.