From Pilatus to Nexia
On a quiet morning in January 2014, barely a year into his tenure as Prime Minister, Joseph Muscat headlined the opening of a new banking structure in Ta’ Xbiex. As opposed to the fanfare he usually gives to every project he is invited to cut ribbons at,
The banking structure went by the name of Pilatus. A more appropriate name could not have been selected, as what ensued in the months and years to come ran parallel to the bank’s namesake from centuries ago.
Not only was this bank set up to launder money for the country’s top brass, it is now the subject of many metaphorical washing of hands in an attempt to absolve blame from anyone connected to the Muscat administration.
Pilatus Bank operated with jaw dropping levels of impunity since it opened its doors. The bank took on an elitist attitude given that it knew it was above the law, and proceeded to make the most of it.
After all it had Keith Schembri as its star client, who took a very personal interest in rushing through its operating license. Keith Schembri had a plan all along, and this was later revealed to be his use of the bank to launder kickbacks he would pay and receive. He used Pilatus Bank to funnel an illicit payment of €650,000 to former Allied Group managing director Adrian Hillman - with the assistance of Brian Tonna and Nexia BT.
Mr Schembri also used the bank to receive kickbacks from Brian Tonna from the sale of passports.
These payments are now subject to criminal inquiries.
What Pilatus Bank, Keith Schembri and Nexia BT did not anticipate was the tenacity of those who will stand up for what is right. It was Daphne Caruana Galizia who started poking holes in their master plan, with revelations that led Muscat to call snap elections a whole year before his term was out.
The official line at Castille has remained one - labelling these revelations as lies and allegations. That mantra is now dead and buried.
On Friday 21 April 2017, the now-indicted chairman of Pilatus Bank Ali Sadr Hashemi Nejad entered the bank premises in the middle of the night and walked out carrying two massive bags, before a mysterious flight destined to Azerbaijan took off in the dead of night some hours later.
Yet again, the police force took no action and only visited the bank after enough time had elapsed for any evidence to be disposed of.
Lies and allegations, was the cry from Castille once more.
Evidence of Pilatus Bank’s involvement in criminal activity is overwhelming and has been in the public domain for a very long time now. But no action had been taken by the Maltese regulatory authorities.
The MFSA has finally understood the consequences of their dereliction in duty and the harm this has caused to the Maltese financial sector.
I first asked for the MFSA to revoke Pilatus Bank’s license late last year and I was ignored. Following letters sent to the European Banking Authority flagging the irregularities of this bank and its chairman, who is now awaiting trial for crimes which carry a prison term of 125 years, the MFSA has finally decided that Pilatus Bank should have its license withdrawn.
The MFSA cites issues such as the indictment of the bank’s chairman, its liquidity coverage and illegitimacy of its source of funds, as well as serious allegations of money laundering in its request to the European Central Bank.
I am no longer alone in requesting the necessary action to safeguard our banking system. Malta’s top regulator – albeit far too late – is now saying the same.
We now have confirmation that Keith Schembri’s bank was a money laundering operation.
“I’ve been answering your stupid questions for the past four years now,” Keith Schembri recently yelled at a Times of Malta journalist. Here’s one question he hasn’t answered how is your position tenable once it has now been confirmed that you defended, worked with and held funds with a bank which the MFSA has applied to close down for massive illegalities?
Pilatus Bank’s license will finally be withdrawn. Daphne Caruana Galizia and Maria Efimova have been vindicated, although at great cost. Our job is now to ensure that the impunity which Pilatus enjoyed for all these years is not one that Pilatus Bank’s accomplices continue to benefit from.
While Pilatus Bank has ceased its operations, those that organised the money laundering through the bank continue to operate with impunity. Nexia BT are the architects of the money laundering structures exposed in the Panama Papers leak. Their continued operation now constitutes the greatest threat to the Maltese financial sector. Regulatory authorities must not repeat past mistakes. They must take action now. The consequences of their complacency will be severe.
Evidence of Pilatus Bank’s involvement in criminal activity is overwhelming and has been in the public domain for a very long time now. But no action had been taken by the Maltese regulatory authorities