PN MP Jason Azzopardi has just said that the Central Bank of Malta has been paying, “by online direct credit”, creditors of Pilatus Bank.
In a Facebook post, the PN MP said: “In Parliament I’ve just revealed and asked Finance Minister why, since last Maundy Thursday afternoon, the Central Bank of Malta (CBM) has been paying by online direct credit the creditors of Pilatus Bank. In April alone, more than €129,000 were paid by the CBM to these creditors. Why is it only Sandro Demarco, the scarlet red Deputy Governor, who is dealing with this? Why all the secrecy? Did OPM exert pressure? Why did the CBM not issue any public announcement? If this is normal good governance, why hasn’t the CBM gone public about it?”
In Parliament, the PN MP asked Finance Minister Edward Scicluna why, last April, the Central Bank paid more than €100,000 to Pilatus bank creditors.
In response, Finance Minister Edward Scicluna said that he could check to get more information as he did not have any information on hand. He noted that Pilatus Bank now falls under MFSA supervision.
On March 20, Ali Sadr was arrested in the USA and charged with circumventing US sanctions on Iran, money laundering, fraud and more. He pleaded not guilty but was denied bail. Sadr faces a possible 125 years imprisonment if found guilty for the charges brought against him. Ali Sadr was the chairman of Pilatus Bank, however upon the news of his arrest the MFSA took over the bank and had him forcibly removed as chairman.
The MFSA had appointed Lawrence Connell to take charge of all the assets of Pilatus Bank Limited. In a statement MFSA had said that Connell will be in charge of any assets related to the investment services business of the, assume control of the Bank's banking and investment services business and to continue carrying on that business until such time as the MFSA may direct.
Scicluna, continuing to answer the question, noted that a competent person was put in charge after the chairman was removed, and the bank is being regulated in terms of directors, shareholders etc. “If that happened, it happened under the instructions of the competent person,” the minister said, stressing that the competent person is a qualified person whose credentials he is willing to present. He said that he will stay on what the competent person who was appointed decides.
Pilatus Bank’s funds should be treated as potential proceeds of crime - Casa
Reacting to Azzopardi’s claims, PN MEP David Casa sent a letter to the Chairperson of the Supervisory Board of the European Central Bank, in which he made her aware of the latest revelations, and asked the European Central Bank to investigate such facts.
“Earlier today, in the Maltese Parliament, MP Azzopardi revealed that since March 2018, the Central Bank of Malta has been paying by online direct credit the creditors of Pilatus Bank. In view of this, MEP Casa called the European Central Bank to:
1. establish whether such funds originated from Pilatus Bank’s personal accounts or were funded by the Maltese taxpayer, and if it is the latter, it should be investigated how Pilatus Bank plans to reimburse such funds;
2. assess whether such transfers were necessary to safeguard the stability of the banking system in accordance with EU rules;
3. investigate whether MFSA authorisation was necessary for these transfers to take place and whether it was given;
4. monitor thoroughly all transactions effected by the Central Bank of Malta on behalf of Pilatus Bank.”
Casa said that the latest revelations could have serious implications and the fact that such transfers have been kept secret for the past weeks speaks volumes.
Central Bank reacts
The Central Bank would like to clarify that, in line with its basic function of acting as banker to the banks, all credit institutions licensed by the MFSA, including the one referred to in the said article,are obliged at law to operate a reserve deposit account with the Central Bank of Malta.
With reference to the specific credit institution referred to in the said article, following the appointment on 22nd March 2018 by the MFSA of a competent person in terms of Article 29(1)(c) of the Banking Act and Article 15A(1)(b) and (c) of the Investment Services Act, and following consultation with the MFSA, each transaction undertaken by the said credit institution through its account held at the Central Bank is conducted with the explicit approval of the said competent person. This is in line with the administrative measures implemented by the MFSA, and therefore, there was no new measure taken by the Central Bank that needed to be communicated to the public. Such transactions by this credit institution, like all transactions by all licensed credit institutions, are effected by the staff of the Central Bank’s Payments and Banking Department.
The Central Bank of Malta categorically denies that the Office of the Prime Minister exerted any kind of pressure on the Central Bank of Malta on any matter.