MFSA analyst gave wrong information to Pilatus inquiry, Repubblika president claims

The murky waters surrounding the MFSA’s apparent resistance in cooperating with the Pilatus Bank magisterial inquiry have been muddied further this morning by allegations that, besides withholding documents, an unidentified MFSA analyst had provided incorrect and misleading information to the inquiry.

Robert Aquilina, the president of Repubblika, a Maltese anti-corruption NGO, had accused former top officials at the MFSA’s Banking Unit of withholding documents detailing Pilatus Bank’s liquidity and capitalisation from a magisterial inquiry, during an interview on NET last month.

In this case, Aquilina was acting in his personal capacity.

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

Aquilina followed up this initial bombshell in a Facebook post this morning. “On 29 July, 2020, an MFSA official testified behind closed doors before Magistrate Ian Farruga in the acts of the inquiry into Pilatus Bank’s operations with regards money laundering. That day the official had said that the MFSA had failed to submit copies of certain documents to the magistrate, despite his prior order.”

After Magistrate Farrugia expressed his concern about this, the official in question had explained that the documents were held in a safe, located inside the Head of Banking Unit’s office, Aquilina’s post reads. 

Only two MFSA officials had access to that safe, the Unit Head had told the inquiring magistrate: Karol Gabarretta and Ray Vella. The official had also deposed that the documents had been handed over to the inquiring magistrate after Gabarretta and Vella had resigned from the authority. At that point, the magisterial inquiry into the bank had been ongoing for 20 months.

“However, in the past days, I have established two important facts in this regard, which are hereby being made known in the public interest," Aquilina Facebook post reads.

“Karol Gabarretta had submitted his resignation from the MFSA on 18 January 2018. The next day he was removed from the key-holder role and from his position as the Head of the Banking Supervision Unit at the MFSA.” Gabarretta’s employment was subsequently terminated after the 6 month “cooling off” period.

“So Karol Gabarretta did not have access and much less control of the safe when magistrate Farrugia ordered the MFSA exhibited the documents it had about Pilatus Bank,” Aquilina’s post reads.

Neither did Vella have access, he said. “Ray Vella resigned from the MFSA on 1 April 2019, 4 months after the inquiry into the operation of Pilatus Bank had started. During this period, Ray Vella, together with another official from the Banking Supervision Unit, still had access to the office safe. It emerges that during those 4 months, Ray Vella had not received any requests or orders to exhibit documents about Pilatus Bank’s operations, not directly from Magistrate Farrugia and neither from his MFSA superiors.” 

Aquilina said that this showed that the MFSA official who testified during the magisterial inquiry had not given the correct information in his testimony.

It also raises a legitimate question as to who the MFSA officers who obstructed the course of justice were, he said.

Aquilina called on the MFSA to explain why the magistrate had only been handed the documentation that had been stored inside the MFSA safe, several months after he had given the order. “It is evident that for several months there had been an attempt by the MFSA to prevent the requested documentation from arriving in the magistrate’s hands.”

“The MFSA has an obligation to provide the public with an explanation about all this. Someone or several people in the MFSA abused their role, but are still being given shelter by the MFSA.”