Pilatus Bank owner Seyed Ali Sadr Hasheminejad.

Malta’s financial services watchdog is refusing to say whether Pilatus Bank is currently in the process of winding down or not, despite lawyers of owner Seyed Ali Sadr Hasheminejad confirming the move to the Times of Malta.

Bail submissions made on behalf of Mr Hasheminejad, who is charged in the US with violating economic sanctions against Iran and with money laundering, said the Ta’ Xbiex-based bank is in the process of “winding up”. When contacted by the Times of Malta, the lawyers confirmed the reports of closure.

Asked to confirm the move, however, the Malta Financial Services Authority would not say if it had been notified that the bank would be closing its doors for good.

Instead, a spokesman reiterated that Pilatus Bank had been placed under the control of a “competent person” following the arrest of Mr Hasheminejad. 

Pilatus remains subject to the regulatory sanctions imposed by the MFSA, which have severely limited the bank’s activities

“The representation of the bank is now vested in the competent person and the voting rights of the shareholder in question have been suspended.

“The bank remains subject to the regulatory sanctions imposed by the MFSA, which have severely limited the bank’s activities. This means that the bank cannot proceed with winding down on its own accord,” the spokesman said.

Pressed to say whether the watchdog had been informed of the bank’s intention to wind up, the spokesman would not say and instead insisted that any actions related to the bank taken by the MFSA would be “communicated publicly at the appropriate time”.

The watchdog came under fire from MEPs during a European Parliament committee meeting in Brussels, where money-laundering allegations surrounding the bank were raised. MFSA officials confirmed that the due diligence on Pilatus Bank was not carried out by KPMG but would not say which firm it was, stating only that it was a “reputable institution”.

The Daphne Project, which the Times of Malta forms part of, has reported that more than 50 companies and trusts owned by Azerbaijan’s ruling elite moved millions of euros across Europe through accounts at Pilatus Bank.

It has since also emerged that the bank has closed its UK branch.