The long-serving director of the Malta Financial Services Authority’s banking supervision unit has stepped down, the Times of Malta has learnt.

Karol Gabarretta confirmed yesterday he had tendered his resignation after moving to another job. When asked why he was leaving now, after 15 years working for MFSA, and whether the move was linked to the Pilatus Bank controversy, Mr Gabarretta replied he felt it was time to move on.

A spokesman for the MFSA said Mr Gabarretta submitted his resignation on January 18, adding that his decision was communicated to all licensed institutions a week later. This paper asked for a copy of Mr Gabarretta’s resignation letter but the request was not met.

The date of Mr Gabarretta’s resignation precedes the arrest in the US of Pilatus Bank chairman Seyed Ali Sadr Hasheminejad on sanction-busting and money-laundering charges by more than two months.

Karol Gabarretta felt it was time to move on

Mr Hasheminejad’s arrest raised eyebrows in various quarters in Malta in connection with the licensing of the Ta’ Xbiex-based Pilatus Bank.

Questions sent two weeks ago to the MFSA about the source of €8 million in capital provided by Mr Hasheminejad to set up the bank remain unanswered.

The money had been deposited in a Bank of Valletta account in December 2013, according to publicly-available MFSA documents.

Opposition leader Adrian Delia last week questioned whether Bank of Valletta was pressured by the government to offer services to Pilatus Bank.

Satabank comes under scrutiny

Mr Gabarretta’s resignation comes at a time when pressure within the industry is mounting on the MFSA, with sources saying there was growing unease about another institution, Satabank, which received a banking licence in 2014.

Over the past months, regulatory authorities are known to have raised compliance issues with Satabank, which has its offices in St Julian’s.

A spokesman said the bank had “tightened” its criteria for selection and on-boarding of new clients to reflect its risk appetite and to remain consistent with upcoming regulatory requirements.

The spokesman said regulatory authorities carried out on-site visits on all regulated entities in Malta and Satabank was no exception.

Satabank’s Bulgarian co-owner, Christo Georgiev, ran an e-money business in Luxembourg prior to the bank being granted a licence to operate in Malta.

According to the Satabank spokesman, the group the bank formed part of had voluntarily surrendered its electronic money institution licence issued by Luxembourg.

“At the time of the licence, Satabank became a direct participant in SEPA and since EMIs cannot be direct participants in SEPA, the Luxembourg licence was deemed to be redundant to the needs of the group of which Satabank forms part,” the spokesman said.

He stressed that the bank was a separate legal entity from Mr Georgiev, although being a director and one of its founders.

KPMG audits both banks and had been involved in the procedure to obtain their licence.

jacob.borg@timesofmalta.com

Independent journalism costs money. Support Times of Malta for the price of a coffee.

Support Us