Jeremy Micallef

Clients of Satabank are only being allowed viewing rights to their accounts, and have no direct access to any of their funds, or services provided by the bank, gaming company director Alan Attard told The Malta Independent.

The Paceville Satabank branch was closed on Monday for “internal staff meetings”, a note on the front door of the bank said. A crowd of people gathered outside the front doors demanding answers and access to their accounts, but they were not let inside.

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Attard complained that they were not given any warning at all that this would happen.

“Besides that, we requested some client withdrawals last week on the 17th and 18th, with the funds being deducted from our accounts but nothing was ever received by the clients!”

Although EY were appointed on the 15th by the MFSA, he points out that the bank did not “advertise” it.

Auditing firm Ernst and Young Ltd was appointed as a competent person to advise and monitor Satabank in the proper conduct of business, the Malta Financial Services Authority said in a statement on the 15th.

The measure came after a joint inspection and audit by the MFSA and the Financial Intelligence Analysis Unit (FIAU) found shortcomings in the bank’s anti-money laundering procedures, according to reports.

“This measure has been taken in order to ensure good governance and controls and the implementation of remedial measures in line with the MFSA’s supervisory requirements as mandated by law. The bank continues to meet its financial prudential requirements,” the financial services regulator said in a statement.

“This regulatory measure shall remain in force until such time as the MFSA shall otherwise direct and shall be without prejudice to any further regulatory action.”

The Central Bank suspended the participation of Satabank plc in Target2-Malta, and the MFSA ordered the bank to suspend a number of its services such as refraining from taking further deposits, or processing any withdrawal or outward transfers from any accounts held by the bank.

Auditors EY are now tasked by the MFSA to take charge of Satabank’s assets in light of some of the bank’s shortcomings with regards to its anti-money laundering procedures, and customers have been asked to provide their customer details to the Bank through their customer support email – in particular, time-sensitive payments which need to go out and income which should be received.

Focusing on his companies’ funds, Attard explained that funds in their bank accounts, that are specifically ring-fenced for his companies’ clients, are used to cover the client’s balances according to the Malta Gaming Authority directives.

“These funds are currently frozen, and our clients have already began contacting our support center asking when they will get paid, etc. At present, EY are not able to give us any form of indication as to when or if they will allow us to pay out our clients.”

MFSA statement

Contacted by this newsroom, MFSA confirmed that “in view of of the Public Notice published by the MFSA on 20th October 2018, funds cannot be withdrawn from Satabank until otherwise directed by the Authority. This decision has been taken to safeguard the interests of the depositors”.

“The MFSA will continue to monitor the situation closely and will be directing the bank to take all necessary actions which it may deem necessary to protect its depositors. Furthermore, the Authority has appointed Ernst & Young as the competent person to take charge of all the assets of the bank and to assume control of the bank’s business until such time as the Authority may direct.”

How did we get here?

In June this newsroom asked Finance Minister Edward Scicluna whether an outcome from the investigation by the FIAU and the MFSA into Satabank has been reached yet, after the Times of Malta reported that there is an examination of its compliance with anti-money laundering and terrorist financing regulations. The minister said “not that I know of. But it’s part of their work, that each bank is always monitored and supervised, that questions are asked, that some issues could be more serious than others, and so it is in the nature of our economic activity since we have such a large financial services sector (that cases are investigated). In fact we are criticised that we are not showing enough cases being charged when compared to the size of our economic activity.”

“I am not saying that it is normal to hear of such cases, however one would expect that cases come forward, and that shows that the regulator is doing its job.”

In July, Satabank was slapped with a €60,500 fine after it was found to be in breach of risk management laws.

Last year various media houses reported that it was named by a Sicilian prosecutor as having been used by fuel trader Gordon Debono to receive ‘illicit’ payments through his Maltese company Petroplus Ltd as part of an alleged €30 million fuel smuggling ring.

Satabank is not the only one to be placed under such a measure.

In March, the MFSA appointed a competent person to take control of Pilatus Bank, which has been linked with several allegations.

Another institution, Nemea Bank, was placed under administration in 2016 and had its license withdrawn in 2017 by the European Central Bank, acting on advice by the MFSA.

Satabank statement