Satabank shareholders say MFSA action caused ‘considerable suffering’ to bank customers

Signia Holding Ltd, as a shareholder of Satabank, says it has been very concerned that the actions taken by the Malta Financial Services Authority (MFSA) have resulted in considerable suffering and inconvenience to the bank’s clients.

In a statement, the majority shareholder in the bank said that on 13 November 2018, “Signia Holding Ltd and Satabank plc, filed an appeal before the Financial Services Tribunal in Malta, asking the court to revoke and reverse the directive of the MFSA dated 15 and 20 October 2018. Prior to this directive, the bank was meeting its prudential financial requirements, including liquidity coverage ratios, comfortably.

“The MFSA appointed a Competent Person to advise the bank on 15 October, which included an international team of consultants, who are charging the bank up to €689 per hour for their work. The shareholders are not opposed to the appointment of the Competent Person as an adviser to Satabank, but to the decision of the MFSA to agree such exorbitant payment rates which will harm the bank and its depositors.

“The shareholders are also appealing against the MFSA’s decision, taken just five days after the appointment of the Competent

“We remain unaware of any reasons for this action

Person as advisor to the Bank, to appoint the Competent Person to take charge of the bank’s assets and to assume control of the bank, effectively ceasing all banking activities and causing undue suffering to customers.

“Between 15 October and 20 October 2018, no explanation was provided why the directive ceasing trading activity was required when other measures had been put in place. We remain unaware of any reasons for this action.”

On 15 October, the Malta Financial Services Authority (MFSA) issued a directive to the bank appointing a Competent Person in terms of Article 29 (1)(b) of the Banking Act to advise the bank in the proper conduct of its business. This was followed on 20 October 2018, with a directive from the MFSA to the bank in terms of Articles 9 and 4B as well as Articles 29 (1)(c) and (d) of the Banking Act. The second directive resulted in the bank effectively ceasing to trade and the freezing of all customer accounts held with it.

In another development, the economy ministry has announced the establishment of a hardship fund for the corporate clients of Satabank. The fund will be managed by Malta Enterprise.

The hardship fund will provide a bridge loan to assist affected companies. The fund will effect and process payments to cover verifiable salary bills. Other critical operating expenses may be considered on a case-by-case basis.

The hardship fund will be made available as of Monday, 26 November 2018 to corporate clients of Satabank with employees resident in Malta, and who have:

• Paid operating expenses through their Satabank account on previous occasions;

• Sufficient funds with Satabank to cover the requested bridge loan; and

• A substantive nexus to the Maltese economy.

Corporate clients in receipt of assistance from the hardship fund agree that, once released, the funds held at their Satabank accounts will be used to repay amounts provided by the hardship fund.

Those wishing to apply for the hardship fund should complete the application form which can be downloaded from the Malta Enterprise website at http://hardshipfund.maltaenterprise.com/.

On Thursday evening, the the Malta Financial Services Authority said Satabank would start releasing the deposits of the first group of bank clients on Monday.