The Malta Financial Services Authority insisted on Wednesday that funds administered by it, 'are and will continue to be used exclusively in the exercise of its functions and operations.'
The Authority made its comment in a five-line statement in reaction to a strongly-worded judicial letter by one of its own governors, Joe Brincat, warning the authority's CEO not to use money 'which is not his' on a golden handshake.
Times of Malta later revealed that CEO Joseph Cuschieri was offering a golden handshake to the chief operating officer, Reuben Fenech, who was dismissed after a quarrel between the two.
The Authority on Wednesday said it 'does not consider it appropriate to comment publicly on the ongoing matters referred to by the said Governor'.
It added that it 'wishes to make it clear that funds administered by it, are and will continue to be used exclusively in the exercise of its functions and operations.'
It said the Board shall remain focused on the implementation of its vision and strategy.
No approval for funds used on golden handshakes
Dr Brincat, a former justice minister, told Mr Cuschieri in the judicial letter to “desist from offering a golden handshake,” and insisted that there was no approval for the use of such funds to terminate the contract of an employee.
Addressing Mr Cuschieri directly, Dr Brincat charged that “this is a crime, as the public funds which you are administering should have been used for specific purposes and not as a blank cheque for you”.
Making it clear that in his capacity as a governor of the MFSA he would not shoulder any responsibility for Mr Cuschieri’s “illegal” actions, he warned that he would take further legal steps if the golden handshake offer went ahead.
MFSA sources told Times of Malta that last week, Mr Cuschieri asked the regulator’s COO, who had been in the job for less than two years with a salary of €100,000, not to report for work any longer.
Mr Fenech, a former head of the National Statistics Office, was recruited by the MFSA a few months before Mr Cuschieri. He was not eligible for an early retirement scheme used to let go other top members of staff.
Asked to state whether Mr Fenech had resigned after a quarrel with the CEO and to explain the reason behind it, a spokesman for the MFSA confirmed that Mr Fenech did not work at the regulator any longer.
Not the first golden handshake controversy
This is not the MFSA's only golden handshake controversy.
The Sunday Times of Malta had revealed that a former HR director at the MFSA, George Spiteri, was encouraged to retire from his job by Mr Cuschieri in exchange for an early retirement package worth €150,000.
However, only a few weeks after receiving his golden handshake, Mr Spiteri was re-employed as senior HR manager with the Registry of Companies, an offshoot of the MFSA.
This case has now been referred to the National Audit Office for investigation.