Government inaction on Pilatus Bank cost taxpayers €345,000 as the government issued a direct order for the “review and assessment services” in relation to the bank, according to the latest government gazette.
The direct order was awarded on 20 September 2018 when Pilatus Bank still had their license despite calls from the European banking watchdog to withdraw it, but the direct order was only announced now.
The EBA stated they had “significant concerns” over the MFSA’s handling of authorisation and supervisor practices relating to Pilatus Bank. The licence was eventually revoked.
To date, no further information on the investigation, or any findings have come to light or been made public.
The company benefitting from the direct order was Promontory Financial Group France, a financial consulting firm that is supposed to give an impartial insight into misconduct, money laundering, and sanctions violations.
In 2015, the firm was suspended on suspicion of helping to obscure misconduct carried out by Standard Chartered bank which was suspected of processing billions of dollars on behalf of Iran, the New York Times reported.
The firm was accused in the US of sanitising the report to decrease the scope of the illicit transactions, and it has since been suggested that murky individuals used the firm because they are considered a “safe pair of hands”.
Promontory Financial Group settled their ‘dispute’ with the regulator was then bought out by IBM in 2016.
Pilatus Bank first came into the spotlight after murdered journalist Daphne Caruana Galizia accused them of a number of crimes including money laundering, kickbacks to Maltese politicians, and large transfers to members of the Azeri ruling elite.
The owner of the bank, Ali Sadr Hasheminejad was arrested in the US in 2018 and is facing up to 125 years in US prison on charges of fraud and evading US sanctions.