Christopher Chandler, the New Zealand-born billionaire behind Legatum, a London-based think tank that emerged as one of the most vociferous supporters of Brexit, has distanced himself from Malta-based Pilatus Bank, stating that his private account there was only used to buy a Maltese passport.
Following news reports on possible money-laundering activities at the Ta’ Xbiex bank, a spokesman for Mr Chandler made it clear that his only association with Pilatus was to acquire a Maltese passport.
According to his spokesman, Mr Chandler, as well as Mark Stoleson, the chief executive of the Legatum Group, opened private accounts at Pilatus Bank to effect the transactions related to their acquisition of Maltese passports.
“The accounts at Pilatus were to take out Maltese citizenship to provide flexibility for their travel and business,” he said.
According to various British newspapers, the Pilatus accounts of both Mr Chandler and Mr Stoleson were personal and not connected to the Legatum Group, and the sums held at the bank were not substantial.
Last January, The Financial Times reported that Mr Chandler and Mr Stoleson, and several of their family members, appeared on the list of individuals who had bought Maltese passports through a scheme introduced by the Labour government in 2013.
Leaked reports connect Pilatus to possible money laundering
According to one of the reports, Brian Tonna, the owner of audit firm Nexia BT allegedly passed some €100,000 in kickbacks from proceeds of the sale of passports to Russian citizens.
The beneficiary of these funds, according to the FIAU, was Keith Schembri, the Prime Minister’s chief of staff.
The FIAU concluded there was reasonable suspicion of money-laundering activities.
No investigations were carried out by the police.
Although Mr Schembri admitted owning an account at Pilatus Bank, he denied the claim of kickbacks. He said the transactions were related to a loan he had made to Mr Tonna in view of the settlement of a separation case.
According to the code of ethics, highlighted also by the FIAU, auditors and accountants are precluded from acquiring loans from persons related to a company that they audit.
Mr Tonna’s Nexia BT was the auditor of the Kasco group – Mr Schembri’s business – when the loan was made. Investigating the operations of Pilatus Bank, the FIAU concluded that there was “glaring, possibly deliberate disregard” of money-laundering controls and “questionable payments from Russian nationals into Pilatus accounts”.
In another report, the FIAU also highlighted “a high level of familiarity” between Mr Schembri and the owner of Pilatus Bank, and that “Mr Schembri took a personal interest in the licensing process of Pilatus Bank plc under the Banking Act”.
Mr Schembri denies the claims, which are now subject to various magisterial inquiries.
The Sunday Times of Malta has revealed that in 2015, Mr Schembri attended the wedding of Pilatus chairman Seyed Ali Sadr Hasheminejad in Venice.
It later emerged that Prime Minster Joseph Muscat was also among the few Maltese guests of the Pilatus Bank chairman for the reception in northern Italy.
Mr Hasheminejad was last week arrested in the US and faces accusations of money laundering and breach of international sanctions, risking 125 years in jail.
MEPs ask EU Central Bank to assess adequacy of Malta’s Pilatus action
A group of MEPs have asked the European Central Bank (ECB) to consider whether Malta’s financial regulator took sufficient measures in the wake of the arrest of Pilatus Bank’s chairman in the United States.
Seyed Ali Sadr Hasheminejad is facing up to 125 years in jail after being arrested last week. He was held over charges of money laundering and sanction busting.
In a statement by members of the ad hoc rule of law committee that visited Malta last year, the MEPs asked the ECB to consider whether the circumstances warranted ECB intervention.
MEPs also urged the ECB to assess the adequacy of the organisational structure of the Malta Financial Services Authority and the independence of its regulatory and operational functions, notably the absence of conflicts of interest among staff and the Board of Governors.
The parliamentarians expressed disappointment that, after months of warnings and allegations on the integrity and compliance of Pilatus Bank’s activities with EU law dating back to reports and investigations by the murdered journalist Daphne Caruana Galizia, no visible action had been taken by either Maltese or European supervisory or law enforcement bodies to ensure the integrity of the EU financial system.
The European Parliament in November adopted a resolution on the rule of law in Malta in which it noted that Pilatus Bank’s licensing process had been expeditious compared with the average time required to ensure compliance with the standards laid down in the Capital Requirements Directive.
The resolution also called on Maltese supervisory and judiciary authorities to investigate the licensing process of Pilatus Bank, in particular regarding the fulfilment of the fit and proper requirements for the management body of financial institutions as mentioned in the Capital Requirements Directive.
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