MFSA CEO Joseph Cuschieri has been challenged in court to explain his "illegal" actions after he sacked a senior official, amid accusations that he was running the authority as a personal fiefdom.

Following a judicial protest which the MFSA ignored, former Labour Justice Minister Joseph Brincat, a member of the authority's board of governors, asked the court to nullify a decision taken by Mr Cuschieri to sack one of the MFSA's top officials, “arbitrarily and against the provisions of the law”.

Referring to the sacking of chief operations officer Reuben Fenech last month, Dr Brincat said the decision was taken without any form of consultation of the board of governors and against all internal MFSA procedures.

Mr Cuschieri had previously denied that he had offered Mr Fenech financial compensation to leave his job.

But Dr Brincat insisted that Mr Cuschieri had called Mr Fenech to his office and offered him a package of six months’ pay as compensation to leave at once.

Mr Fenech refused the offer and is contesting Mr Cuschieri’s decision.

According to Dr Brincat, Mr Cuschieri had even told the board of governors that he was advised by the HR department that the MFSA internal rules did not apply for the sacking of the COO. Dr Brincat said that the HR department later denied giving such advice.

In his sworn court application under a law which gives the court the right to review administrative decisions, Dr Brincat insisted that Mr Cuschieri’s decision was not communicated in any way with the board of governors, as dictated by the law, lacked transparency, accountability and justice.

According to Dr Brincat, the MFSA governors were not consulted on the decision, despite that Mr Cuschieri later said that he mentioned this case ‘en passant’.

Dr Brincat said that despite all his efforts to make sure that the MFSA follows the law, even to safeguard his personal responsibility as a governor of the regulator, “the board was more interested in saving the reputation of the organisation than observing the law”.

“It seems that the CEO has an idea that he can do whatever he wants and employ who he wishes. For example, he employed whoever he deemed without any observance of the MFSA rules and those of the government,” Dr Brincat charged.

Giving Mr Cuschieri and the board of governors 20 days to respond, Dr Brincat said the court should proceed to declare the CEO's actions as illegal and reverse the decision on Mr Fenech.

He asked also the court to declare a vacancy published by the MFSA for a new COO, also without the board’s knowledge, as null and without effect.