A network of “corrupt government officials” have set about draining Pilatus Bank of all its assets, lawyers for the bank’s parent company Alpene Limited have claimed. 

The bank’s former chairman Ali Sadr is the sole director of the Hong Kong-based Alpene. 

In US court documents filed a few days ago, the lawyers say ever since the bank was “wrongfully” shuttered by regulators, it has been run in a “corrupt scheme designed to strip the bank of its assets to the detriment of its owners and to the benefit of Maltese officials, individuals and businesses”. 

Alpene is seeking information in the US about the process to back claims it was unfairly treated by Malta as part of proceedings it has opened against the government before the International Centre for Settlement of Investment Disputes, an international arbitrator. 

The lawyers say the bank’s license was revoked solely based on the “misguided allegations” against Sadr. 

Sadr was arrested in the US in March 2018, prompting Maltese regulators to take over the bank and appoint an external administrator. 

In the US, money-laundering charges against him were dropped after disclosure failures by US prosecutors in the case against him. 

'Exorbitant fees' 

Sadr’s lawyers allege that the bank’s administrator Lawrence Connell entered into an agreement with a law firm connected “directly and indirectly” with the MFSA’s incoming chairman at the time, John Mamo. 

The law firm, Mamo TCV, were paid “exorbitant fees” for “purported legal work”, with the resources of the bank used to pay these fees, Sadr’s lawyers said. 

“In addition, Connell sold and liquidated all the assets of the bank and placed them directly into the hands of the government of Malta in their Central Bank”.

Connell resigned from his role as the bank’s administrator earlier this year. 

Sadr’s lawyers also claim US consultancy firm Promontory has also been used to “drain” the bank of its assets. 

Former MFSA's chair's role flagged

The lawyers say that prior to the “wrongful takeover” of Pilatus, then MFSA chairman Joe Bannister had “urged” the bank to hire Promontory to do some work for the bank. 

They say Pilatus had refused to hire Promontory, despite Bannister’s urging, due to the “exuberant fees” they had proposed to the bank.

Former MFSA chairman Joe Bannister is in the lawyers' crosshairs.Former MFSA chairman Joe Bannister is in the lawyers' crosshairs.

Promontory was later appointed by Connell to carry out work at the shuttered bank. 

Sadr’s lawyers further accused the government of engaging in a series of “allegedly retaliatory acts” against Pilatus, particularly after the bank’s owners raised concerns about the “wrongful and reckless actions” against it.

They claim Maltese officials threatened former Maltese bank staff members and persons connected to the bank, who have "direct and intimate knowledge" of the alleged corruption of Maltese officials, with criminal prosecution and political pressure. 

A former bank official was charged on Thursday for breaching money-laundering laws. 

Malta’s anti-money laundering watchdog fined the bank €4.9 million this week over these failures. 

Mamo TCV Advocates react

In a right of reply on Thursday, Mamo TCV Advocates said:

"In view of the recent articles in the press – including your online portal – Mamo TCV Advocates states categorically that all allegations regarding any fee sharing, consultancy or other arrangements between the firm and Professor John Mamo are entirely false. 

"Professor Mamo had not even been involved in the firm John Mamo & Associates when it merged with Tonna Camilleri & Vassallo in 2000, much less did he receive any remuneration or financial compensation in connection with the merger or in connection with any engagements that the firm was involved with after the merger took place. 

"As such, any reports linking the firm to Professor Mamo and alleging that he has a financial or any other interest in the firm are totally false.

"Insofar as allegations that we have seen in connection with the work we have carried out are concerned, we are restrained from commenting on any engagements undertaken by the firm by laws on professional secrecy. Nevertheless, we can confirm that we have always carried out all engagements in a professional manner and with the highest levels of integrity - as consistently recognised by our peers and clients throughout the years."

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