Pilatus Bank owner remains off the hook as government mum on ongoing international case

Justice Minister Jonathan Attard is refusing to provide details about an ongoing international court case filed in 2021 by Ali Sadr, the owner of the notorious Pilatus Bank, which was closed by the European Central Bank (ECB) after years of alleged money laundering activities in Malta.

The Shift has learned that, despite the case being before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) for four years, there has been little real progress.

Ali Sadr filed the case shortly after the conclusions of a magisterial inquiry in 2021, which recommended charging him in Malta for money laundering offences.

As a result of his ICSID filing, both the Malta Police and the Attorney General decided to postpone arraigning Ali Sadr until the international case was resolved. According to recent data published in the Government Gazette, Malta paid over €140,000 in court expenses related to this case last year.

Inquiries made by The Shift regarding the potential timeline for concluding the case, the present state of affairs, and the likelihood of charges against Ali Sadr in Malta were met with silence from Minister Attard.

Limited information available on the ICSID portal indicates that the case, Alpene vs the Republic of Malta, is still ongoing. Earlier this month, both Malta and Alpene (the company associated with Ali Sadr) filed their latest observations in the case.

The Shift revealed in 2022 that Ali Sadr had filed a case before the ICSID, an investor-state dispute settlement body. He is seeking damages and claims loss of earnings due to the closure of Pilatus Bank. Sadr has also requested that any legal action planned against him in Malta be suspended.

The ICSID recommended suspending all proceedings against Ali Sadr by Malta pending a decision on the case. Recommendations from the ICSID are recognised as binding in the international community.

Using a Hong Kong-based company, Alpene Ltd, Ali Sadr argued that threats of criminal prosecution against him constitute harassment and that the liquidation of Pilatus Bank violated his rights. He claims that Malta breached a 2009 bilateral treaty with China, which addresses the arbitration of disputes between states and investors.

In 2022, an EU Court dismissed an attempt by Pilatus Bank to regain its banking licence, which Malta revoked in 2018, following a decision by the European Central Bank. Additionally, Ali Sadr’s Pilatus Bank was fined a record €4.9 million by Malta’s anti-money laundering unit for “serious and systemic failure” to adhere to anti-money laundering laws.

A magisterial inquiry, which identified Ali Sadr among those responsible for alleged money laundering at the bank, has called for his criminal prosecution, along with other foreign directors, none of whom currently reside in Malta.

Although the bank itself and its former anti-money laundering officer, Claude-Ann Sant Fournier, were charged in 2021, none of the bank’s high-ranking officials have been extradited to Malta to face prosecution.

Ali Sadr is suspected of knowingly facilitating his bank’s clients in transferring, converting, and concealing the proceeds of crime, according to the findings of the inquiry.

The magisterial inquiry, which cost taxpayers €7.5 million, was concluded in December 2020.