‘No ac­cess what­so­ever to our ac­counts’ – Sata­bank ac­count holder

The Malta Business Weekly - - FRONT PAGE - Jeremy Mi­callef and re­ports

Clients of Sata­bank are only be­ing al­lowed view­ing rights to their ac­counts, and have no di­rect ac­cess to any of their funds, or ser­vices pro­vided by the bank, gam­ing com­pany direc­tor Alan At­tard told The Malta In­de­pen­dent.

Sata­bank de­pos­i­tors have taken to phys­i­cally wait­ing out­side its St Ju­lian’s head­quar­ters in a des­per­ate bid to find out what will hap­pen to their money, The Times re­ported.

The Paceville Sata­bank branch was closed on Mon­day for “in­ter­nal staff meet­ings”, a note on the front door of the bank said. A crowd of peo­ple gath­ered out­side the front doors de­mand­ing an­swers and ac­cess to their ac­counts, but they were not let in­side.

At­tard com­plained that they were not given any warn­ing at all that this would hap­pen.

“Be­sides that, we re­quested some client with­drawals last week on the 17th and 18th, with the funds be­ing de­ducted from our ac­counts but noth­ing was ever re­ceived by the clients!”

Al­though EY were ap­pointed on the 15th by the MFSA, he points out, the bank did not “ad­ver­tise” it.

Au­dit­ing firm Ernst and Young Ltd were ap­pointed as a com­pe­tent per­son to ad­vise and mon­i­tor Sata­bank in the proper con­duct of busi­ness, the Malta Fi­nan­cial Ser­vices Au­thor­ity said in a state­ment on the 15th.

The mea­sure came af­ter a joint in­spec­tion and au­dit by the MFSA and the Fi­nan­cial In­tel­li­gence Anal­y­sis Unit found short­com­ings in the bank’s anti-money laun­der­ing pro­ce­dures, ac­cord­ing to re­ports.

“This mea­sure has been taken in or­der to en­sure good gover­nance and con­trols and the im­ple­men­ta­tion of re­me­dial mea­sures in line with the MFSA’s su­per­vi­sory re­quire­ments as man­dated by law. The bank con­tin­ues to meet its fi­nan­cial pru­den­tial re­quire­ments,” the fi­nan­cial ser­vices reg­u­la­tor said in a state­ment.

“This reg­u­la­tory mea­sure shall re­main in force un­til such time as the MFSA shall oth­er­wise di­rect and shall be with­out prej­u­dice to any fur­ther reg­u­la­tory ac­tion.”

The Cen­tral Bank sus­pended the par­tic­i­pa­tion of Sata­bank plc in Tar­get2-Malta, and the MFSA or­dered the bank to sus­pend a num­ber of its ser­vices such as re­frain­ing from tak­ing fur­ther de­posits, or pro­cess­ing any with­drawal or out­ward trans­fers from any ac­counts held by the bank.

Au­di­tors EY are now tasked by the MFSA to take charge of Sata­bank’s as­sets in light of some of the bank’s short­com­ings with re­gards to its anti-money laun­der­ing pro­ce­dures, and cus­tomers have been asked to pro­vide their customer de­tails to the bank through their customer sup­port email – in par­tic­u­lar, time-sen­si­tive pay­ments which need to go out and in­come which should be re­ceived.

Fo­cus­ing on his com­pany’s funds, At­tard ex­plained that funds in their bank ac­counts, that are specif­i­cally ring-fenced for his com­pa­nies’ clients, are used to cover the client’s bal­ances ac­cord­ing to the Malta Gam­ing Au­thor­ity di­rec­tives.

“These funds are cur­rently frozen, and our clients have al­ready be­gan con­tact­ing our sup­port cen­ter ask­ing when they will get paid, etc. At present, EY are not able to give us any form of in­di­ca­tion as to when or if they will al­low us to pay out our clients.”

An Ital­ian busi­ness­man was quoted to have said Sata­bank was the only bank will­ing to open an ac­count for him.

“It has be­come im­pos­si­ble for for­eign­ers to open a bank ac­count in Malta, even if they run a clean and le­git­i­mate busi­ness”, he said.

For the Ital­ian busi­ness­man, his or­deal with Sata­bank would prob­a­bly lead him to re­lo­cate his startup to an­other coun­try.

An Is­raeli en­tre­pre­neur, who claimed to have over €1 mil­lion in a cor­po­rate ac­count for a com­pany he runs in the gam­ing in­dus­try, told The Times this ex­pe­ri­ence with Sata­bank had likely killed his busi­ness.

“I have not been able to send money to my af­fil­i­ates. My busi­ness here is prob­a­bly ru­ined,” he said while wait­ing rest­lessly out­side the bank and ex­chang­ing sto­ries with other ac­count hold­ers there.

MFSA state­ment

Con­tacted by this news­room, MFSA con­firmed that “in view of the Pub­lic No­tice pub­lished by the MFSA on 20th Oc­to­ber 2018, funds can­not be with­drawn from Sata­bank un­til oth­er­wise di­rected by the Au­thor­ity. This de­ci­sion has been taken to safe­guard the in­ter­ests of the de­pos­i­tors”.

“The MFSA will con­tinue to mon­i­tor the sit­u­a­tion closely and will be di­rect­ing the bank to take all nec­es­sary ac­tions which it may deem nec­es­sary to pro­tect its de­pos­i­tors. Fur­ther­more, the Au­thor­ity has ap­pointed Ernst & Young as the com­pe­tent per­son to take charge of all the as­sets of the bank and to as­sume con­trol of the bank’s busi­ness un­til such time as

the Au­thor­ity may di­rect.”

How did we get here?

In June this news­room asked Fi­nance Min­is­ter Ed­ward Sci­cluna whether any out­come from the in­ves­ti­ga­tion by the FIAU and the MFSA into Sata­bank has been reached yet, af­ter the Times of Malta re­ported that there was an ex­am­i­na­tion of its com­pli­ance with anti-money laun­der­ing and ter­ror­ist fi­nanc­ing reg­u­la­tions.

The min­is­ter replied “not that I know of. But it’s part of their work, that each bank is al­ways mon­i­tored and su­per­vised, that ques­tions are asked, that some is­sues could be more se­ri­ous than oth­ers, and so it is in the na­ture of our eco­nomic ac­tiv­ity since we have such a large fi­nan­cial ser­vices sec­tor (that cases are in­ves­ti­gated). In fact we are crit­i­cised that we are not show­ing enough cases be­ing charged when com­pared to the size of our eco­nomic ac­tiv­ity.”

“I am not say­ing that it is nor­mal to hear of such cases, how­ever one would ex­pect that cases come for­ward, and that shows that the reg­u­la­tor is do­ing its job.”

In July, Sata­bank was slapped with a €60,500 fine af­ter it was found to be in breach of risk man­age­ment laws.

Last year var­i­ous me­dia houses re­ported that it was named by a Si­cil­ian pros­e­cu­tor as hav­ing been used by fuel trader Gor­don De­bono to re­ceive ‘il­licit’ pay­ments through his Mal­tese com­pany Petro­plus Ltd as part of an al­leged €30 mil­lion fuel smug­gling ring.

Sata­bank is not the only one to be placed un­der such a mea­sure.

In March, the MFSA ap­pointed a com­pe­tent per­son to take con­trol of Pi­la­tus Bank, which has been linked with sev­eral al­le­ga­tions.

An­other in­sti­tu­tion, Ne­mea Bank, was placed un­der ad­min­is­tra­tion in 2016 and had its li­cense with­drawn in 2017 by the Euro­pean Cen­tral Bank, act­ing on ad­vice by the MFSA.

Photo: Alenka Fal­zon

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