The Malta Financial Services Authority said March 21 that it took control of Pilatus Bank, the lender at the center of a corruption scandal, and ordered that its Iranian owner, Ali Sadr Hasheminejad, be removed immediately from the board and other executive posts he holds.
Hasheminejad's voting rights as a shareholder have also been suspended and he is barred from exercising legal and judicial representation of the lender.
The bank also needs to seek the regulator's approval for any movement of assets. Further, shareholders, board members, senior management officials and other related persons have also been disallowed from doing any banking transactions.
Hasheminejad was arrested and indicted March 20 by the U.S. Department of Justice after being charged with organizing a scheme to illegally channel over $115 million from Venezuela to Iranian-controlled companies through Western banks. The DoJ laid six counts against Hasheminejad, who has been under investigation since 2013, with allegations including money laundering and conspiring to violate Iran sanctions and commit bank fraud.
Although Pilatus was not mentioned in the DoJ's indictment and there are no allegations about its involvement in the scheme, the bank was a frequent subject of Maltese journalist Daphne Caruana Galizia, who died in a car bombing in 2017, the Financial Times reported. Caruana Galizia published leaked reports by Malta's anti-money laundering authority that said the lender had provided accounts to foreign companies owned by politically connected persons in Malta.
Pilatus Bank was in the process of suing Caruana Galizia when she died, according to The Guardian, which noted that the suit was later dropped.
Pilatus Bank also operates an office in London, The Guardian reported, although it was never granted permission to open accounts for U.K. customers. A spokesperson for the U.K. Financial Conduct Authority told the newspaper that the bank operates in Britain through passporting rules under the EU Capital Requirements Directive and that it is working with other regulators on the issue.
In 2016, Malta's anti-money laundering agency said the bank showed a "glaring, possibly deliberate disregard" for money-laundering controls, The Guardian reported. David Casa, a Maltese member of the European Parliament and frequent critic of Prime Minister Joseph Muscat, wrote to the European Banking Authority following Hasheminejad's indictment to urge the regulator to look more closely at Pilatus.
Casa also urged the EBA to look into the Maltese FSA to see if it was aware of Hasheminejad's alleged crimes and to see if the granting of a banking license to Pilatus Bank was influenced by a Maltese government official, the newspaper said. Pilatus Bank did not comment on the matter, it added.