Pilatus Bank has gone to court in an effort to force the MFSA to withdraw its directives against the bank.
In a statement issued on Friday evening, Pilatus Holdings accused the financial regulator of being negligent and gullible, and said that it would be holding it responsible for the “very significant” damages it could end up suffering.
The bank said it had filed a judicial protest earlier this week calling it to withdraw directives imposed and serving it notice that it was ready to sue for any damages it incurred.
The MFSA froze Pilatus Bank’s assets in March and forced its chairman out. It subsequently appointed an administrator to oversee the bank and asked the European Central Bank to withdraw its banking licence.
In its statement, Pilatus said that its regulatory standards were “among the highest in Europe” and that its liquidity coverage ratio was six times higher than the required amount back in February, when it stood at 601%.
Sources within Malta’s financial regulator have said that Pilatus faced a “serious liquidity problem” following the arrest of the bank’s chairman, Ali Sadr Hasheminejad, in the US back in March.
'Like judge and jury'
In its statement on Friday, Pilatus Holdings accused the MFSA of having “acted like judge and jury” in its dealings with the bank and of treating its officials “like convicted criminals”.
It said the MFSA had been given information that allegations linking Pilatus to Panama company Egrant Inc. were false as early as June 2017, but that the regulator had “blindly accepted” claims made by Maria Efimova.
“It is now unjustifiable that, following the publication of the conclusions of the Egrant Inc. Inquiry, which has completely exonerated Pilatus Bank from the malicious allegations brought against it, the MFSA has persisted with maintaining the irrational hard-line approach taken against Pilatus Bank – possibly as a desperate attempt to try to save face,” Pilatus Holdings said, accusing the regulator of struggling "to adapt itself with reality".
'Fair treatment is almost impossible'
The MFSA has said that it is investigating every transaction and deposit made with Pilatus. The bank said that it had nothing to hide “as it has always acted within the remit of the law”, but expressed serious reservations about the probe.
“When the parties investigating are not impartial and have a track record of being driven by political motivations, the likelihood of an independent and fair treatment for Pilatus Bank is close to impossible,” it said, asking why the MFSA was so driven to investigate a bank with “no known breaches of its conduct or regulatory obligations”.
The bank noted that its chairman Mr Sadr had pleaded not guilty to the charges he faces in a New York court.
"It would be an outrage to punish a person who is presumed innocent even before such person has had the opportunity to be heard," it said in its statement.
Last month, the European Banking Authority found that Malta’s FIAU had breached EU anti money-laundering laws by failing to adequately sanction Pilatus Bank for, among other things, its “failure to provide the required customer diligence documentation”. The FIAU has said it has serious reservations about the way the EBA went about its investigation.
The statement is the second by Pilatus Holdings since Egrant inquiry conclusions were published by the Attorney General. In its first, the bank had said that the inquiry had “vindicated” the bank, which it said had been subjected to an unjustified witch-hunt driven by racism.