Liquidation of the now-shuttered Satabank and the return of customers’ funds has hit a snag over the Inland Revenue’s ability to raise future tax claims against the bank.
In his latest report, liquidator Richard Galea Debono says further progress on the bank’s liquidation depends on the finance minister waiving the possibility of any future tax claims against the bank. The report was tabled in parliament last month.
The St Julian’s bank was placed under the control of administrators in 2018 over widespread breaches of money-laundering laws. Its banking licence was subsequently withdrawn in 2020.
Although Satabank’s liquidator has determined there are no tax dues, the tax commissioner still has a right to raise new tax claims against Satabank within a five-year period.
The liquidator is asking the finance minister to protect against this possibility by issuing a tax waiver, otherwise, a final list of Satabank’s liabilities cannot be drawn up.
“The right of the commissioner to raise further [tax] claims creates what can be called contingent liabilities rendering the list of liabilities meaningless. I can state that to my knowledge and after due inquiry, there are no fiscal dues.
“In fact, I had claimed a refund which was affected by the commissioner,” the liquidator says in his report.
The bank has assets of €75.8 million and liabilities of €69.6 million, the report shows.
Although the bank became aware of the widespread deficiencies and the risks it exposed itself to, it remained passive and never implemented remedial actions- FIAU
Galea Debono said, however, that funds cannot be released to depositors and other creditors until the bank’s assets and liabilities are determined with certainty, including any tax dues.
Last August, the bank’s liquidator published a 120-page list of the bank’s creditors and the amounts due to them.
The list of account holders and other creditors with money still trapped at the bank shows some notable names, including Satabank’s co-owner Christo Georgiev.
Georgiev had sued Times of Malta in his native Bulgaria for allegedly damaging his reputation by linking Satabank to suspect activities. Another notable creditor is investment firm XNT, which has itself landed in hot water with the local authorities over lax anti-money laundering controls.
The amounts due to creditors vary wildly, from a few euros to over €10 million to an e-wallet company.
A public report by the Financial Intelligence Analysis Unit (FIAU) laid out how Satabank “blindly” took on a portfolio of clients from another financial institution in 2015 without assessing the money-laundering risks involved. A review of client portfolios at Satabank revealed “gross deficiencies” in relation to Maltese anti-money laundering and terrorism-financing laws, the FIAU said.
“Thus, although the bank became aware of the widespread deficiencies and the risks it exposed itself to, it remained passive and never implemented remedial actions,” it said.
The FIAU said these lax safeguards exposed not only the bank to money-laundering risks but the country as a whole, as Satabank serviced various financial intermediaries and enablers who used the bank to transfer “significant volumes of monies”.