A financial services tribunal has ordered the MFSA to revisit its decision to effectively suspend the operations of Portmann Capital after the firm was linked to an alleged conspiracy to embezzle over a billion dollars from Venezuela’s state-owned oil company.
Some of the funds, amounting to about €511 million, were allegedly wired to Malta-based Portmann Capital between late 2014 and early 2015.
The MFSA came down hard on the firm last August, after a German banker was charged in the US in relation to the scheme.
In a decision this week, the tribunal found that the MFSA’s decision to stop Portmann Capital taking on new clients and carrying out transactions was tantamount to cancelling its licence.
The MFSA argued before the tribunal that its actions against the firm were taken as a result of Portmann Capital’s association with serious money-laundering charges.
A few months prior to the decision in August 2018, the FIAU had found potential serious and extensive breaches of anti-money laundering rules, the MFSA insisted.
Portmann Capital complained to the tribunal that the decision to suspend its operations rather than completely revoke its licence had left it in limbo.
Had the licence been cancelled by the MFSA, Portmann Capital said it would have been able to continue to operate pending an appeal.
The MFSA’s decision to halt its operations without cancelling its licence had instead left it without the ability to carry out any meaningful economic activities pending the appeal, the firm argued.
According to the tribunal, the MFSA decision to halt Portmann’s operations in that manner was “abusive and unfair”.
“The MFSA through its actions and inactions deprived the appellant the benefit it would have enjoyed of a cancelled license pending appellate proceedings”, the tribunal ruled.
It ordered the MFSA to carry out an assessment of Portmann Capital’s current internal control mechanisms within a three week period.
Prior to the MFSA’s action, the Maltese police had been working with US federal agents for nearly in an international investigations into the alleged racket.
No action has yet been taken by the police against anyone at Portmann Capital.
Independent journalism costs money. Support Times of Malta for the price of a coffee.Support Us