One of the ‘big four’ audit firms, KPMG, has defended its role as auditors of the now infamous Pilatus Bank, Ta’ Xbiex, amidst growing concerns due to the former chairman’s arrest in the United States.

“KPMG and all our people have acted professionally and ethically in all our dealings with the Bank [Pilatus Bank], in line with the professional standards that we adhere to and apply for all our clients.  Maltese law concerning client confidentiality prevents us from commenting further,” it said in a statement.

Some weeks ago, Pilatus Bank’s owner and former chairman Ali Sadr Hasheminejad, Iran, was arrested in the United States for circumventing US sanctions on Iran, money laundering and fraud. He is facing a possible 125 years in prison, has pleaded not guilty to the charges and was denied bail. He was forced out as chairman by the Maltese regulator following the news of his arrest.

It transpired that the bank got its licence, in January 2014, while US authorities were investigating the wealthy Iranian. Malta is not mentioned in the Bill of Indictment issued against Sadr.

Pilatus Bank was at the centre of a major scandal last year after slain journalist Daphne Caruana Galizia had alleged that it was a vehicle for money laundering by processing funds received through kickbacks by high ranking Maltese officials such as the Prime Minister’s chief of staff Keith Schembri.

Her most controversial allegation was that the Prime Minister’s wife, Michelle Muscat, was the Ultimate Beneficial Owner of a Panama based shell company which was used to receive illicit funds via Pilatus Bank.

All involved vehemently deny wrongdoing and magisterial inquiries are underway to investigate the veracity of these claims.

KPMG assisted Pilatus Bank with getting its licence by auditing the bank and giving it a clean bill of health. In 2016, after Financial Intelligence Analysis Unit reports highlighted serious shortcomings in anti-money laundering procedures through a compliance report, and KPMG was again commissioned to carry out a compliance report into the same anti-money laundering procedures.

In an MEP rule of law report it stated that following the KPMG’s report, a second visit was made by FIAU officials and the financial watchdog concluded that the previous issued “no longer subsist”.

Links between KPMG and Pilatus Bank continue to emerge after it was made known that Juanita Bencini, President of the Institute of Financial Services Practitioners and a consultant at KPMG together with her husband Austin Bencini, who is on the board of directors at Allied Newspapers were present at the bank’s former chairman’s wedding in Venice.

They were present at the wedding together with Prime Minister Joseph Muscat and his wife, and chief of staff Keith Schembri and his wife.

The first connection which became public between KPMG and Pilatus Bank was the news that the bank’s risk manager, Antoniella Gauci, used to work at the firm. She had been filmed together with the jailed Iranian leaving Pilatus Bank through the back exit carrying suitcases on the night when slain journalist Caruana Galizia had published the claims about Pilatus and the Prime Minister’s wife.