MFSA CEO Joe Cuschieri has distanced himself from a ‘costly’ decision to bring in two Grant Thornton employees on secondment within the regulator’s licensing authorisation unit.
A source familiar with the arrangement said it was problematic both from a cost aspect as well as there being a potential conflict of interest, since Mr Cuschieri’s brother-in-law is a partner at Grant Thornton.
For just one month last year, Grant Thornton charged the MFSA €33,000 for the secondment of one employee as deputy head of banking with the authorisation unit and another as a senior manager within the same unit.
The source acknowledged that the unit had been understaffed for years and was widely viewed as a “bottleneck” when it came to the licensing process.
However, a deputy head employed directly by the MFSA would typically earn €50,000-€56,000 yearly, amounting to around €4,000 a month. A senior manager would earn in the region of €43,000 to €48,500, amounting to a monthly salary in the region of €3,700.
A spokeswoman for the MFSA said the decision to source two financial services experts from Grant Thornton was a temporary engagement to address critical human resource capacity gaps in process licensing applications, until the necessary new employees were hired and trained.
The spokeswoman said the procurement process with respect to this engagement was handled by the competent members of management, and not by Mr Cuschieri.
According to the spokeswoman, the €33,000 figure being quoted was not reflective of the monthly cost of the arrangement.
The spokeswoman refused to put a cost on the arrangement despite disputing the figure obtained by Times of Malta.
“We do not usually relay commercial information on negotiated rates of specific engagements. Please note that all professional services, sourced by the MFSA, will be disclosed in its 2019 annual report”, the spokeswoman said.
The MFSA 2018 annual report showed a 37 per cent increase in the regulator’s costs, with professional fees increased by 700 per cent from €748,288 to just under €6 million.
No breakdown of these professional fees was provided in the 2018 annual report.