MFSA man Pilatus wants summoned to US court, resigns ‘competent person’ role

The Maltese financial regulator has replaced the person appointed to run Pilatus Bank, after the bank’s shareholders filed American judicial proceedings against Lawrence Connell.

Connell was appointed in March 2018 to take over Pilatus as its ‘competent person’ after the arrest of Pilatus owner Ali Sadr Hasheminejad in Washington D.C. that year. Hasheminejad, a naturalised American and St Kitts & Nevis citizen, has since been acquitted of charges of money laundering and breaching US sanctions in Iran.

But the bank wants Connell to provide it with all the information in his hand since being installed by the MFSA, so that Pilatus can file proceedings against the European Central Bank, which cancelled its bank licence after Hasheminejad’s arrest in February 2018.

On Wednesday, the MFSA said Connell had resigned from his role as competent person with immediate effect Robert Ancilleri has been selected to occupy the role of competent person.

Robert Ancilleri is an auditor by profession and runs his own practice providing accounting, business, and regulatory advisory services. He previously served as the Chief Accounting Officer at HSBC Malta, and was previously part of the setting-up team of Banif Bank. Ancilleri is a director of three entities listed on the Malta Stock Exchange.

In December, Pilatus was denied a request to summon Connell, whose information is required to assess the level of damages,that Pilatus will request from the European Central Bank, in a yet-to-be-instituted court case.

In December 2020, Justice Joseph A. DiClerico denied the request for ‘discovery’ from New Hampshire resident Lawrence Connell.

The revocation of the Malta-based private bank, controversial for its close association to members of the Azerbaijani ruling dynasty, came in March 2018 when owner Hasheminejad was arrested in the U.S.A. But in an unprecedented turn of events, after first being found guilty by the New York court, the United States District Attorney filed a nolle prosequi, effectively throwing the sponge over a grievous error in withholding evidence from the Hasheminejad defence team. The courts have since expunged the guilty verdict. 

Pilatus’s German lawyer, Otto Hendrik Behrends, claimed that the ECB revoked the bank’s licence on the prompting of the MFSA after the wrongful arrest of Hasheminejad.

Behrends said Connell is a key witness in an annulment action at the European Court of Justice, because he is at the centre of MFSA’s decisions and has knowledge of ECB’s “improper motives” to shut down the bank.

The judge however said that Pilatus required more than a “subjective intent” for legal action against the ECB, and had to provide an indication that action is being contemplated: “Pilatus Bank has not indicated where the action might be brought or what claims it would raise against the ECB,” the judged said, saying the action appeared “merely speculative” and no “more than just a twinkle in counsel’s eye.”

As a result, Pilatus had not shown that the requested discovery would be used in a damages action, but limited to a pending annulment action against the ECB in the European Court of Justice for the bank licence.

Pilatus has accused both the ECB and the MFSA of shuttering the bank because of falsely alleged crimes that predated the bank’s existence.  “At the time of the indictment, the Maltese Financial Services Authority and Malta’s political leaders were besieged by international accusations of ‘looking the other way’ while Malta’s banks enabled money laundering and global sanctions violations.”

Hasheminejad ran a private bank in Malta, which he had licensed in 2013, and which largely dealt with millions in reserves owned by the Azerbaijani ruling family and oligarchs.

Hasheminejad ran a private bank in Malta, which he had licensed in 2013, and which largely dealt with millions in reserves owned by the Azerbaijani ruling family and oligarchs. 

His bank was implicated in the Egrant affair, when the late journalist Daphne Caruana Galizia claimed the bank had processed a $1 million payment from the Aliyevs of Azerbaijan to the wife of former prime minister Joseph Muscat. The allegation was disproven by a Maltese magisterial inquiry along with other allegations she made about Pilatus Bank, but by then the banks’ other dealings for Azerbaijan had come under the lens of financial investigators. When Hasheminejad was arrested in Dulles airport in the United States in February 2018, the Maltese financial regulator shut down the bank and started an investigation.