Authorities, wake up!
How Pilatus Bank still holds a banking license is a mystery. Up until two weeks ago hardly anyone had heard the name Pilatus Bank, but that suddenly changed when journalist Daphne Caruana Galizia claimed that the bank was used for the transfer of more than $1 million from the daughter of the President of Azerbaijan to Egrant Inc, a company which Caruana Galizia claims belongs to the wife of the Prime Minister, Michelle Muscat.
Shortly afterwards the entire country witnessed the scenes, aired on Net TV, of the bank’s chairman sneaking out the back door carrying two heavy-looking pieces of luggage right after the allegation was made that documents were stored at the bank that proved Egrant’s high profile ownership.
Then Opposition Leader Simon Busuttil claimed to hold evidence showing that the same bank was used by Keith Schembri, the PM’s embattled chief of staff, to receive kickbacks from Brian Tonna of Nexia BT (and formerly Mossack Fonseca Malta) from the sale of citizenships scheme.
The Opposition has gone as far as to state that the bank, which only has a Malta license, obtained shortly after the 2013 election, was purposefully set up for the shady dealings of a few individuals.
The bank, of course, denied all this and even launched a PR exercise, inviting all newsrooms for an interview with the chairman. As it
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turned out, the bank’s chairman refused to answer most of the questions put to him.
There were already doubts about how serious this financial institution was, but these doubts were cemented when the bank invited the journalists to view CCTV footage of the now famous Russian whistleblower – a former employee who claims to have seen proof that Egrant belongs to the PM’s wife – to support its claim that the woman was paid her salary, a claim she refutes. That the bank showed CCTV footage of a former employee to journalists is highly unethical.
But the information revealed by The Malta Independent yesterday, coming from an FIAU investigation into Pilatus Bank, suggests that the bank is anything but a serious financial institution. The FIAU report confirms speaks about a payment of upwards of €1 million into a ‘high-risk’ account, without any information on the origin of the funds.
It also sheds light in the bank’s failure to register SWIFT records, unsatisfactory background checks on Politically Exposed Persons and an exposure to high risks of money laundering and the funding of terrorism.
The investigation was carried out by the Financial Intelligence Analysis Unit (FIAU) along with the Malta Financial Services Authority (MFSA). This means that both entities had the investigation report, which was also sent to the police and was also available to the Attorney General, as the chairman of the FIAU.
Despite the findings of the investigation, delivered to them a year ago, neither one of these authorities has taken action.
The MFSA last week defended licensing Pilatus Bank, saying that the bank application “was processed and assessed in full compliance with applicable legal requirements and in accordance with the Authority’s authorisation procedures for the granting of a credit institution licence”.
This comes from the same institution involved in the investigation that resulted in the damning FIAU report.
It is also the same institution that recommended to the Central Bank the revocation of Nemea Bank’s license after the former “failed to make tangible progress on the Authority’s demands to fulfil regulatory requirements”.
And MFSA chairman Joe Bannister yesterday shirked any form of responsibility, when contacted by this newspaper, and insisted that he was not privy to supervisory reports. In our view the issue is simple: he is the head of the MFSA so the buck stops with him.
Likewise, the Attorney General and the Police Commissioner have a lot of explaining to do now that the cat is out of the bag and it has become known that the damning report landed in their laps more than a year ago, and that no action was taken.