MEPs urge European Central Bank to assess adequacy of MFSA measures

“In view of the gravity of the recent events” MEPs have sent a letter urging the European Cenral Bank (ECB) to “assess the adequacy” of the measures taken by the Maltese Financial Services Authority (MFSA) in response to the arrest of Pilatus Bank chairman Sayed Ali Sadr Hasheminejad in the United States.

The MFSA imposed a freeze on the business of the bank, and the regulator ordered the removal of the chairman as bank director, suspending his voting rights as shareholder of the bank and ordering him to refrain from exercising legal and judicial representation of it.

In the letter, the MEPs explained how the delegation sent to Malta in November met with the MFSA and inquired about the ownership of the bank. The Authority subsequently assured the European Parliament (EP) that all checks had been done – particularly on the owner of the bank – who was last week arrested for bank fraud and money laundering among other charges.

The charges against the chairman “came as a particularly relevant new element to the EP delegation,” the letter read, as the delegation was reassured that the owner was properly vetted – by the MFSA just a few months prior.

The letter was signed by MEPs forming part of the ad-hoc delegation – namely Ana Gomes, David Casa, Monica Macovei, Sophie In’t Veld, Sven Giegold, and Takis Hadjigeorgiou.

MEPs also called for the ECB to “systematically check whether the business model of other Maltese institutions pose risks stemming from financial criminality, e.g when it comes to requirements about fit and proper management,” as well as to assess the “adequacy of the organisational structure of the MFSA.”

“We regret that, after months of warnings and allegations on the integrity and compliance on Pilatus Bank’s activities with Union law, dating back to reports and investigations of the murdered journalist Daphne Caruana Galizia, no visible action was taken  by either Maltese or European supervisory or law enforcement bodies,” the letter read.