Pilatus Bank membership in Malta Bankers’ Association ‘terminated’

The membership of Pilatus Bank in the Malta Bankers’ Association has been terminated with immediate effect, the association said on Tuesday.

In a statement, the Malta Bankers’ Association noted with concern the events leading to the regulatory actions announced by the Malta Financial Services Authority on 21 and 22 March 2018 in relation to Pilatus Bank plc.

The association’s board has considered the position and has determined that in the circumstances, Pilatus Bank’s membership of the Malta Bankers’ Association is to be terminated with immediate effect.

On 21 March, then Pilatus Bank chairman Ali Sadr Hashemi Nejad was arrested in the USA and was accused of circumventing sanctions on Iran. He is accused of facilitating the transfer of $115 million of Venezuelan money to Iran via the US banking system to build 7,000 housing units. In addition, he has also been charged with money laundering and fraud.

Sadr has pleaded not guilty to the charges brought before him while the US court has denied the man bail.

He was the chairman of Pilatus Bank, ta’ Xbiex, which was at the centre of a major scandal when it was alleged that the Prime Minis- ter’s wife received illicit funds to her Panama company through the bank. All involved have vehemently denied the accusations while a magisterial inquiry is still underway.

Since the news of his arrest, the MFSA banned Sadr from his roles at the bank, as well as banning Pilatus Bank from conducting banking transactions, including withdrawals or deposits held with the bank by the shareholder, members of the board of directors and senior management officials of the bank, or any connected persons or related persons thereto, whether direct or indirect. The bank was also ordered to obtain the MFSA's prior approval before effecting any movement of the bank's assets.

In effect, this has prevented the bank from carrying out any transactions for the time being.

Further to the MFSA’s action, the European Banking Authority also stated that it has carried out a preliminary inquiry on the MFSA itself. The EBA’s remit is to ensure that national regulators are carrying out their duties as watchdogs appropriately and line with EU law.