Pilatus to sue European Central Bank for damages in American courts

After wrongful indictment of Pilatus owner, bank to sue ECB over licence revocation that ‘made example of local bank’ when besieged by international accusations

Ali Sadr Hasheminejad is turning his wrongful conviction against the decision of the ECB to close down his bank
Ali Sadr Hasheminejad is turning his wrongful conviction against the decision of the ECB to close down his bank

Pilatus Bank plc has given notice in the American courts that it will sue the European Central Bank for damages after revoking its licence. 

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 Ali Sadr Hasheminejad was arrested in the U.S.A., on charges of having violated the sanctions regime against Iran. 

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. 

Now Pilatus Bank have requested a New Hampshire court to “take discovery” from Lawrence Connell, the expert appointed by the Malta Financial Services Authority to oversee the winding down of the bank.

Pilatus’s owners say that as the MFSA-appointed competent person, Connell has intimate knowledge of Pilatus’s financial condition, and the merits of the ECB’s and MFSA’s “post hoc attempts to justify their decisions to shutter the bank and revoke its license.” 

Connell’s information is required to assess the level of damages that Pilatus will request in the courts from the European Central Bank. 

Pilatus has accused both the ECB and the MFSA of shuttering the bank because of falsely alleged crimes that predated the bank’s existence. 

“But, 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. 

“Under intense international pressure, the MFSA sought to make an example of a local bank and sprung recklessly and wantonly into action at the first sign of an opportunity, which was Mr Sadr’s wrongful indictment. Indeed, by March 21, 2018, a mere three days after Mr Sadr's indictment, the MFSA took over Pilatus, divested Mr Sadr of his voting rights, stripped the bank's board of directors of authority, halted all banking transactions and services, and appointed Mr Connell to oversee Pilatus as its ‘competent person’, which is similar to a receiver. 

“Within a mere three months of Mr Sadr’s indictment, the MFSA already had petitioned the European Central Bank to revoke Pilatus’ banking license, which the ECB did on November 2, 2018, effecting what amounted to the permanent and unjustified shutdown of a healthy, stable, and profitable banking institution.” 

Pilatus said the MFSA’s “breakneck assault” on the bank and ECB's “complicity through its baseless license revocation” are now the subjects of the European Court of Justice action against the European Central Bank, in which Pilatus wants an order annulling the ECB's withdrawal of its banking license.

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.

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