Satabank clients still in the dark on when their funds will be returned, GRTU laments

Although Satabank has been dealt a hefty fine for regulatory breaches, the bank’s clients have still received no word on when their funds will be returned, despite there being no connection between the breaches and the clients’ money, the GRTU said.

The GRTU’s Malta Chamber of SMEs lamented that, after it was reported by MaltaToday on Sunday that Satabank had been fined €3.5 million by the Financial Intelligence Analysis Unit for money laundering violations, a number of Satabank clients who are members of the union are still, nine months down the line, waiting to get their funds back.

In a statement on Wednesday, the GRTU said it fully agreed that breaches against money laundering laws should be penalised and that any violations should be dealt with in strictest possible way across the board.

However, although there was no link between the funds of the bank’s clients and the violations, clients were being left in the dark on the process of their file, with no timeline on when their funds will be returned.

“Some of the clients are suffering huge cash-flow issues and others have been put into a position where they had to let go of employees, could not pay their medical expenses and lost growth opportunities,” the GRTU said.

The union emphasised that, in light of the fact that there was “no clear line of communication” between bank representatives and the clients, it would continue to act as a point of reference for the many affected clients.

“Although the GRTU acknowledges that some of its members' funds have been returned, the union continues its efforts to see that [all] funds are returned to its members in the shortest possible time,” it said, as it urged the authorities to avoid any unnecessary delays “which continue to harm Malta’s reputation at large.”

Satabank had been under the control of auditors from EY after the Malta Financial Services Authority ordered it to cease all business activity, and was the subject of a joint inspection by both the MFSA and FIAU over shortcomings in the bank’s anti-money laundering procedures.

All 12,000 of Satabank’s accounts were frozen by the MFSA, with controlled releases of funds being undertaken by EY.

The police have since been involved, investigating what could be billions in euros which passed through the bank’s payment channels.

Sources in the financial regulator told MaltaToday that billions of euros passed through the bank in high-risk transactions, citing lax controls and lack of due diligence controls on the transactions.This was the first time in Maltese banking history that the MFSA, in coordination with the Central Bank of Malta and the FIAU, had taken such action against a retail and commercial bank.

The joint inspection is combing through each account to ensure that any questionable funds do not leave the Paceville bank.

Satabank offered an innovative online payment channel which allowed small peer-to-peer payments to be made. Prior to setting up in Malta, Satabank’s Bulgarian co-owner Christo Georgiev ran an e-money business in Luxembourg. A self-described pioneer of innovative payment solutions who has worked in the fintech sector since 2000, according to a biography on one of his company’s websites, Georgiev also owns Bulgarian iCard AD, and the Liechtenstein-based myPos AG.

Satabank has protested exorbitant rates it was being charged by the “competent persons” appointed to take control of its bank, in a formal protest lodged with the Malta Financial Services Tribunal.

The bank said it was paying members of the international team up to €689 an hour. “In the context of a small bank that is a Maltese-licensed and regulated credit institution, the above rates are exorbitant and unreasonable. [They] are clearly not in the interest of the bank, nor of its depositors, employees and shareholders.

“If such rates were to be maintained unabated, the fees of the competent person will inevitably deplete the bank’s capital…”