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BREAKING: Malta Takes Action Against Pilatus Bank Chairman After Arrest In United States

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The Malta Financial Services Authority (MFSA) has taken actions against the chairman of Pilatus Bank after he was arrested by the United States and charged with evading US sanctions on Iran, but it has not suspended the institution’s banking license.

MFSA ordered to remove Mr Ali Sadr Hasheminejad, with immediate effect, from the position of director of the bank and any executive roles that he holds within it, as well as suspending the exercise of his voting rights as shareholder. 

The aim is to separate Mr Hasheminejad from the bank.

“In addition, in terms of Article 4B of the Banking Act and until notified further, the MFSA has directed Pilatus Bank Limited not to allow any banking transactions, including withdrawals or deposits held with the bank by the shareholder, members of the Board of Directors and Senior Management officials of the bank, or any connected persons or related persons thereto, whether direct or indirect,” MFSA said.

The bank has been further directed to obtain the MFSA’s prior approval before effecting any
movement of the bank’s assets. The Authority is also considering other supervisory measures that may be applicable in the circumstances.

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Finance Minister Edward Scicluna addressed Parliament this afternoon, in which he emphasised that Malta was not mentioned in the US indictment documents, nor was any Malta-based bank. He assured the public that the Maltese financial institutions would “continue doing their bit” to protect the sector’s reputation. 

The supervisory council of Malta’s financial services regulator had convened at 8:30am for an emergency meeting that ended up lasting all day. When questioned by journalists, Prime Minister Joseph Muscat and finance minister Edward Scicluna both said that any decision on Pilatus Bank’s future will be ruled upon by the MFSA. 

Pilatus Bank is headquartered in Malta, having obtained a banking  license in January 2014. In April 2017, it also set up a branch in Mayfair, London.

Ali Sadr Hasheminejad was arrested last night on charges that he evaded US sanctions on Iran by funnelling over $115 million from Venezuela through US banks as part of a multimillion deal – signed by Iran and Venezuela back in 2006 – to build 7,000 housing units in the South American country. The housing project was led by Stratus Group, an Iranian conglomerate controlled by Ali Sadr’s family.

US prosecutors say Ali Sadr belonged to a committee overseeing the project’s execution and that he took steps to evade US economic sanctions by concealing the role of Iran and Iranian parties in payments sent through the US banking system. 

Pilatus

This included using his St Kitts and Nevis passport to incorporate companies in Switzerland and Turkey which in turn received payments from US banks on behalf of Stratus Group, therefore hiding the Iranian ownership and evading US sanctions.

Maltese authorities had known that a foreign jurisdiction was investigating Ali Sadr for money laundering and illegal money transmissions since at least 2016, as revealed by a leaked report by the Financial Intelligence Analysis Unit (FIAU). 

Pilatus Bank hit the headlines last year when late journalist Daphne Caruana Galizia wrote that the Prime Minister’s wife Michelle Muscat owns the secret Panama company Egrant – a story denounced by Prime Minister Joseph Muscat as “the biggest lie in Malta’s political history”. 

According to the report, the mysterious Egrant declaration of trust was retrieved by Pilatus Bank employee Maria Efimova from a safe which the bank had kept in its kitchen, away from the glance of CCTV cameras. According to Caruana Galizia’s original report, the safe also contained documents pertaining to the bank’s Russian clients and Maltese PEPs, including John Dalli and the Prime Minister’s chief of staff Keith Schembri. Schembri’s Pilatus Bank account was confirmed by a leaked report by the FIAU, while Dalli later confirmed he used to have an account too but that this was closed due to inactivity. 

Ali Sadr’s arrest came only a few hours after Maria Efimova herself came out of hiding in Crete and gave herself in to the Greek police – reportedly amid fears that the British media intended to link her to the recent Salisbury nerve agent controversy.

Read the full text of the MFSA statement in reaction to Pilatus Bank chairman arrest

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READ NEXT: Malta Reacts To Pilatus Bank Chairman Getting Arrested By The USA

Tim is interested in the rapid evolution of human society and is passionate about justice, human rights and cutting-edge political debates. You can follow him on Instagram or Twitter/X at @timdiacono or reach out to him at [email protected]

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