A financial services company has obtained a warrant of prohibitory injunction to stop the Malta Financial Services Authority from appointing inspectors to review client files, despite a pending appeal.
MSFP Financial Management Limited got its warrant to stop the MFSA from forcing a full-scale inspection by independent inspectors to review client files other than those inspected during an authority compliance visit.
Mr Justice Lino Farrugia Sacco temporarily upheld the request until the issue is trashed out before him during a sitting appointed for Wednesday.
The issue has been dragging on since February 2008 when the authority conducted its first inspection, later being told that the company had taken the appropriate steps to rectify non-compliance issues.
Eight months later, the authority conducted another inspection and concluded that the company had made an effort to implement the requirements.
Two years later, following yet another inspection, the authority said the MFSP ought to commission independent assessors experienced in this area to review all the client files other than the 30 reviewed during the inspections.
In May last year, it reminded the company of its decision and in October informed it that it was going to appoint inspectors of its own accord.
The company appealed this decision before the Financial Services Tribunal, claiming that the review the MFSA ordered had “no reasonable purpose”.
It challenged the authority’s decisions on various grounds, among which were human rights issues, abuse of discretion, manifest unfairness, wrongful application of the law and the “witch-hunt which the MFSA decided to embark upon” by carrying out further file reviews.
Notwithstanding this appeal, which is still pending, the authority wrote to the MFSP last month informing it of its decision to appoint auditing company KPMG as inspectors at a fee of €30,000 to be borne by the company.
The company filed and temporarily obtained a warrant to stop the MFSA from enforcing its decision since there was a pending appeal.