Updated 2.30pm with former CEO's reply

Accusations of “inept” financial record keeping, regulatory failures and client money being endangered have been playing out in the courts as part of a war between two owners of a payment services provider.

Em@ney’s problems were thrust into the headlines in September after Times of Malta reported that clients of the Ta’ Xbiex firm were unable to access their money for several days.

Court testimony by one of the shareholders indicates Em@ney handles around “€60 million” in client funds.

The issues faced by its clients appear to be the fallout from a year-long battle between Em@ney’s backseat majority shareholder Oriana Moltisanti and its ex-CEO and minority shareholder Germano Arnó.

A slew of court cases filed by the warring owners has released confidential reports and letters by the FIAU, MFSA and the sanctions monitoring board into the public domain.

The reports document Em@ney’s alleged failures in 2019 to abide by money-laundering prevention rules, as well as more recent failures in the company’s governance structures.

While Moltisanti cites these reports as evidence of Arnó’s mismanagement, Em@ney had strongly contested the regulatory findings under his tenure.

Arnó has in turn accused Moltisanti of endangering the company’s operations and client funds by initiating a boardroom coup last year which ultimately saw his removal as CEO in

August and the appointment of a new board of directors.

The former CEO did not respond to a request for comment.

Client with alleged ‘mafia links’

Em@ney was fined €360,000 by the FIAU, an anti-money laundering body, three years ago.

A confidential report by the FIAU, filed as evidence in one of shareholder court cases, tells the back story to that fine.

During an “unannounced” 2019 inspection, the FIAU found the company’s customer base included high-risk clients who were the subject of negative media reports and “were involved in financial crime”.

One customer was found to have alleged links with the ‘Ndrangheta mafia, a powerful criminal organisation out of Calabria in Italy.

Among several other problems flagged by the FIAU, Em@ney was accused of having failed to properly monitor risky transactions between certain clients, including two transactions totalling €3.2 million based on a “gentleman’s agreement”.

As a result of the FIAU’s findings, Em@ney was also fined by the sanctions monitoring board for failing to adequately screen its customers for sanctions.

At the time, Em@ney strongly rebutted the FIAU’s findings, arguing that the reports’  methodology and findings were procedurally flawed. It also appealed the €360,000 fine.

A subsequent audit by the FIAU concluded last year that “tangible progress” was made to improve Em@ney compliance with anti-money laundering laws.

The majority shareholder who recently ousted Em@ney’s management team, however, told Times of Malta that the FIAU findings in 2019 “were one of the key indicators that the previous directors and CEO were not properly managing Em@ney’s operations”.

“Similarly, the fine issued by the sanctions monitoring board in 2020 was another red flag… These sanctions reinforced the growing realisation that immediate corrective action was necessary to safeguard the company’s future,” Rosario Fiorentino, a consultant to Moltisanti said. 

‘Substantial shortcomings’

The MFSA in September ordered Em@ney to stop taking on new clients until it ensures that the “proper governance and internal controls” are in place to operate its payment services licence in accordance with the law.

Court documents show the financial regulator had long been raising concerns about the company’s operations.

In a May 2021 letter, the regulator found “substantial shortcomings” at Em@ney.

The regulator said Em@ney had been operating without an approved money-laundering reporting officer since November 2020, and had proposed unqualified staff for the two key roles of internal auditor and independent director.

Arnó was found to wield significant power within Em@ney without the necessary checks and balances in place.

Minutes kept by the Em@ney board were deemed to be “inadequate” by the MFSA. 

Despite Em@ney pushing back at many of the MFSA’s findings, the regulator warned in a December 2022 letter that certain “persistent weaknesses” at the company had not been resolved.

Fiorentino claims Em@ney’s majority shareholder was not made aware of the concerns raised by the MFSA in 2021.

“The gravity of the situation only became evident when Em@ney’s directors disclosed the MFSA’s follow-up letter in December 2022,” Fiorentino said.

Fiorentino said the December 2022 letter was only disclosed to the majority when Arnó’s team was seeking approval to nominate two new directors.

“At this stage, despite the lack of detailed information, it became evident that the company’s governance was seriously flawed and lacking in both transparency and expertise,” Fiorentino said.

In response, the majority shareholder attempted to clear out Em@ney’s entire board of directors, triggering an avalanche of legal claims and counterclaims by the two warring owners.

Arnó and his management team were ousted in August 2024, however, the former CEO has claimed in court that the boardroom manoeuvres were carried out “illegally”.

He has further alleged that these manoeuvres put the company, which administers some “€60 million” in client funds, at risk.

Fiorentino disputes this. He says all legal decisions to date have contradicted Arnó’s claims that the majority shareholder’s action put client funds at risk.

“Furthermore, the newly appointed directors, with MFSA approval, are working closely with local authorities to safeguard client interests.”

Fiorentino said that during his two decades of experience in the sector, he has never encountered financial statements as lacking in detail and substance as those of Em@ney under the previous management.

A clean sweep?

Fiorentino was nominated by Em@ney’s majority shareholder as one of the company’s new directors, as part of the boardroom coup.

The nomination has yet to be approved by the MFSA, which vets nominations for key positions in licensed companies.

Fiorentino has been named in Italian media reports as being under investigation in connection with a €1.7 billion hospital tender in Italy.

He told Times of Malta the case related to a “tender dispute” in which he was involved professionally.

“It has been reviewed by multiple courts, all of which have ruled that no crime or misconduct occurred on my part.

“Unfortunately, the Italian legal system allows for investigations even after court decisions have been made.

“We respect the process and remain confident that this matter will be resolved positively,” Fiorentino said.

Fiorentino said that to his knowledge, the MFSA is still processing his nomination as a director.

“I understand that regulatory reviews take time, and I await the MFSA’s decision”.

Former CEO replies

In a statement sent to Times of Malta after publication, Em@ney's former CEO and minority shareholder Germano Arnó said the company had, under previous management, been committed to acting in line with its licence and uphold international standards.

A commercial court had concluded the company was not in any risk and that shareholders had no cause for concern, he said. The judgement, which is publicly available, had also concluded that regulatory issues “are being rectified, and there is no indication that the previous board acted flagrantly incorrectly or negligently."

Arno said the FIAU fine was being appealed, and the customer with the alleged mafia links was not an Em@ney client.

A follow-up independent audit confirmed that the company was growing and maintaining standards, he said. 

“The current problems facing Em@ney have only arisen in the last two months, coinciding with the takeover by the new management, presided by Mr Gianfranco Antonio Vento and Massimo Famularo under what seems to be the guidance of Rosario Fiorentino. 

“Until this transition, Em@ney operated smoothly and in full compliance with the regulatory framework. This attempt to shift blame has become increasingly evident, and it is clear that the majority shareholder and the new board of directors must assume full responsibility for the consequences of their actions—and inactions—which have led to the present situation,” he said, adding that he intended to use all legal means to defend his rights.