Pilatus auditor KPMG says it acted professionally in dealings with private bank

The audit firm KPMG Malta has declared it acted professionally and ethically in dealings with the private bank Pilatus, whose chairman Ali Sadr Hasheminejad was arrested in the US on charges of breaching sanctions against Iran.

KPMG partner Juanita Bencini was one of the guests at Hasheminejad’s wedding in Venice, where even Maltese prime minister Joseph Muscat and his chief of staff Keith Schembri, a client of the bank, were in attendance.

“KPMG and all our people have acted professionally and ethically in all our dealings with the bank, in line with the professional standards that we adhere to and apply for all our clients.  Maltese law concerning client confidentiality prevents us from commenting further,” the audit firm said in its first official comment since the arrest of Hasheminejad.

The Iranian-born chairman of the private bank, which was licenced to operate in Malta in 2014, was arrested at Dulles airport two weeks ago, charged with facilitating the payment of US dollars for a Venezuelan housing project to Iranian beneficiaries, namely his family company.

Hasheminejad first began applying for a banking licence in the summer of 2012. KPMG assisted and advised him in compiling the application and liaising with the Maltese regulator, according to a letter that Pilatus Bank chief executive Hamidreza Ghanbari sent in 2017 to MEPs. Hasheminejad’s “source of wealth and source of funds were vetted acutely as part of the MFSA due diligence process”.

KPMG also assisted the bank in major compliance shortcomings identified by the Financial Intelligence Analysis Unit in 2015, which later gave Pilatus a clean bill of health.

US charges

According to the US charges, Hasheminejad enabled payments in US dollars through a bank account at Zurich-based Hyposwiss Private Bank Ltd, held in the name of Clarity Trade and Finance. JPMorgan’s New York branch was the intermediary bank.

Hasheminejad was accused of employing artifice to hide the beneficiaries of the payments for the housing project constructed by his family company, giving the bank the impression that the business was conducted between a Turkish company and Venezuela.

Sources at the Swiss bank told the Financial Times there was no indication that the end beneficiary was an Iranian company. “All the contracts were done by lawyers, properly done, and all the shareholders were outside of Iran,” he said.

But the source also dismissed the sanctions evasion allegations as “politically motivated”.

Hasheminejad’s father Mohammed Seyed Hasheminejad – an Iranian millionaire who headed the Iranian private bank EN bank – said that the family company Stratus Group was only a minor shareholder in IIHC, which built the housing complex in Venezuela. “IIHC has transferred no single penny to Iran and hence has not violated any US sanctions,” he said, denying that the Turkish subsidiary of Stratus Group was set up to circumvent sanctions.

The Financial Times has also established that another of the suspected co-conspirators is Pilatus Bank non-executive director Mustafa Cetinel, who held a 4% stake in Stratus International Contracting, the company created by Hasheminjad to collect the allegedly illicit payments.

At one point, Cetinel recommended a name change for IIHC to one that would remove the reference to Iran. Alternative names suggested included “International Iron Housing Company”.

The MFSA recently froze asset movements inside Pilatus Bank following the arrest of its chairman.

Hasheminjead is also a director of Pilatus Capital in London’s Mayfair, after Pilatus Bank passported its banking licence to the UK. The bank has not yet opened for business in the UK, meaning it could not carry out regulated activities such as opening accounts.