Malta’s financial regulator has refused to authorise the release of legally “privileged” documents in a US case opened by Pilatus Bank’s parent company.
Alpene Limited is seeking documentation to bolster its claim that Pilatus Bank was wrongfully shuttered by regulators in response to the arrest of bank owner and chairman Ali Sadr.
The money-laundering and sanction-busting case against Sadr collapsed last year over disclosure failures by US prosecutors.
As part of the legal claim against Maltese regulators, Alpene Limited has demanded access to documents in relation to the actions taken by the MFSA leading up to the appointment of senior banker Lawrence Connell to run Pilatus Bank.
Connell was appointed by the MFSA as the “competent person” to run Pilatus Bank on the recommendation of Promontory, a US consultancy firm.
According to legal filings, Promontory had a “long-standing” relationship with the MFSA dating back to 2012.
Former Promontory CEO, Elizabeth McCaul told the US court she was directed by the MFSA not to divulge any privileged supervisory communications between Promontory and the financial regulator about Pilatus.
McCaul said she merely contacted Connell to determine his availability and willingness to act as a “competent” person to run Pilatus Bank.
She said Promontory had no role in the actual appointment or the contractual terms drawn up between the MFSA and Connell.
Alpene Limited has claimed that Connell, in cahoots with Promontory and Maltese law firm Mamo TCV, have set about selling off and liquidating the bank’s assets, placing them in the hands of the government of Malta.
Both Promontory and Mamo TCV have denied the insinuations of wrongdoing.
Connell resigned from his role as the bank’s administrator earlier this year.
Alpene Limited’s lawyers further accused the Maltese government of engaging in a series of “allegedly retaliatory acts” against Pilatus, particularly after the bank’s owners raised concerns about the “wrongful and reckless actions” against it.
They claim Maltese officials threatened former Maltese bank staff members and persons connected to the bank, who have “direct and intimate knowledge” of the alleged corruption of Maltese officials, with criminal prosecution and political pressure.
Pilatus Bank and former official Claude-Ann Sant Fournier were charged in September over alleged money-laundering activities at the bank.
Malta’s anti-money laundering watchdog fined the bank €4.9 million in August over these failures.