The Malta Financial Services Authority late last night froze all the assets of Pilatus Bank, hours after its chairman was arrested in the US.

In a statement, the regulator said the bank has been directed not to transact any business whatsoever irrespective of the client or the counter-party.

The directive was issued in the wake of the arrest and arraignment in the US of Pilatus Bank chairman Ali Sadr Hashemi Nejad on charges that he had violated US sanctions.  

The MFSA on Wednesday also suspended Mr Hashemi Nejad's chairmanship of the bank.

In its second directive it said its freeze "applies to all deposits and withdrawals and any disposal of the bank's assets".

It said the bank has been directed to obtain the MFSA's prior approval before effecting any movement of its assets.

Pilatus Bank is the subject of various magisterial inquiries, namely in connection to the allegation that it transferred $1 million from the Azerbaijani ruling family to the prime minister’s wife, and of hosting bank accounts for the prime minister's chief of staff Keith Schembri to receive payments from auditor Brian Tonna, reportedly from the sale of Maltese citizenship. The claims have been rejected.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.