A European court has dismissed an attempt by Pilatus Bank to challenge the authority of a government-appointed administrator.

The shuttered bank was placed under the control of an administrator in March 2018, following the arrest of the bank’s owner Ali Sadr on money-laundering charges in the United States.

Charges against Sadr were later dismissed, however, he and other bank executives remain wanted in Malta over a separate money-laundering case. 

Pilatus Bank had argued before the Court of Justice of the European Union that administrator Lawrence Connell had a conflict of interest, as he was appointed to the role by the government.

The bank’s license was withdrawn by the European Central Bank in November 2018, following a recommendation by Malta's financial regulator.

In a judgement on Thursday, the European court said Pilatus Bank failed to provide any evidence relating to a conflict of interest in the administrator’s role.

“The fact that the competent person was appointed by the national competent authority which submitted the proposal for withdrawal of authorisation to the ECB is not in itself sufficient to characterize the existence of a conflict of interest,” the court said.

Pilatus Bank and official Claude-Anne Sant Fournier were charged with money laundering in September 2021.

Rule-of-law NGO Repubblika has since taken the Attorney General to court, arguing that other officials like Sadr have yet to face prosecution, despite recommendations by an inquiring magistrate.

The magistrate signed off on arrest warrants to be issued for Sadr and other officials in February 2021.

However, these warrants were never executed by the Maltese authorities.

Sadr was known to be close to ex-Prime Minister Joseph Muscat and his chief of staff Keith Schembri, even inviting them to his lavish wedding in Italy after the bank got its licence in Malta.

The case against Pilatus Bank and Sant Fournier is still ongoing