SIPP provider STM Group has voiced its support for chief executive Alan Kentish following his arrest in Gibraltar over allegations connected to a tax dispute and alleged failure to disclose the proceeds of crime.

The AIM-listed company said in a statement today that on Thursday 19 October Mr Kentish was arrested by the Royal Gibraltar Police on an allegation of failure to disclose under the Proceeds of Crime Act 2015. The arrest came approximately two years after STM itself filed two Suspicious Activity Reports to the Royal Gibraltar Police during a tax dispute with a client.

The board of STM says it is “fully supportive” of Mr Kentish's actions in relation to the matter and is “profoundly disappointed” with the current situation. Directors say they are confident the matter will be resolved in Mr Kentish's favour in the very near future.

The company said that in November 2015 the ‘ultimate beneficial owner’ of a client, who has been a client of STM for over 15 years, became involved in a tax dispute between two countries for the years 2008 to 2013.

The company, which bought UK SIPP provider London & Colonial last year, said that at the time the dispute arose 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 supplied by the MLRO to Gibraltar’s Financial Intelligence Unit.

According to STM, under Gibraltar legislation, the unit must respond within 14 days if it wishes to direct any action to be taken. STM says there was a lack of response from the unit and the company took this as acceptance by them for STM to continue as normal.

While the Royal Gibraltar Police have yet to conclude their investigation, the advice received by Mr Kentish and by STM is that the allegations have no merit, says the company which has offices in Malta, Spain, Jersey and other jurisdictions. The company says it will make further announcements “in due course, as appropriate.”

The firm describes itself as a cross-border financial services provider which offers a range of services to HNW individuals including SIPPs and QNUPs.

STM has administrative offices in the UK, Malta, Jersey, Spain and Gibraltar, with its head office based in Gibraltar. The board of STM is “currently reviewing“ where its head office should be, given its operational requirements.