MFSA official 'hid Pilatus financial documents in office safe' during magisterial inquiry, transcripts reveal

The serious accusation was levelled against former top officials at the authority’s Banking Unit by Repubblika President Robert Aquilina, during an interview on NET on Tuesday

Malta’s Financial Services Authority (MFSA) failed to hand over documents detailing Pilatus Bank’s liquidity and capitalisation to a magisterial inquiry, according to court transcripts revealed by Repubblika.

The serious accusation was levelled against former top officials at the authority’s Banking Unit by Robert Aquilina, the president of Repubblika, an NGO championing the rule of law in Malta, during an interview on NET on Tuesday.

Aquilina told host Lea Hogg that court records of testimony delivered behind closed doors in July 2020 by a senior analyst at the MFSA, showed that he told inquiring magistrate Ian Farrugia that his order to submit documents regarding the capitalisation and liquidity of Pilatus Bank had not been followed through.

It was only after the magistrate expressed concern at the fact that the MFSA had failed to exhibit the internal capital adequacy assessment process (ICAAP) and the internal liquidity adequacy assessment process (ILAAP) in 2017, despite the order, that it emerged that the documents had been hidden in a safe inside the MFSA’s Head of the Banking Unit’s office.

The witness had gone on to inform the inquiring magistrate that only two MFSA officials had access to that safe: Karol Gabarretta and Ray Vella and the ICAAP and ILAAP documents had only been passed on to the inquiring magistrate after Gabarretta and Vella had resigned.

By that time, Magistrate Ian Farrugia’s inquiry into Pilatus Bank’s operations, which had started in November 2018, had already been ongoing for 20 months.

The new information is the latest in a series of Repubblika’s revelations about inaction by Malta’s financial, law enforcement and judicial authorities with regard to Pilatus Bank.