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15 maltatoday | SUNDAY • 5 SEPTEMBER 2021 NEWS but ended up receiving over four times this amount, likely around €320 million. Another customer received the equivalent of €7 million through a first transaction, de- spite indicating that account activity was expected to be €3 million. Another way the bank breached its legal obligations was an instance where 15 cli- ents indicated that their source of wealth would be generated from the operations of the same business operation. While their expected turnover should have amounted to €390 million, the financial statements for the specific business operation re- ferred to a comprehensive in- come of only €23.5 million. One client is revealed in the report to be a well-known en- trepreneur in Azerbaijan and the United Arab Emirates, being involved in various in- dustries including agriculture, food and beverage, retail, and construction. The account turnover for this customer was set to be €5 million, but the bank held no details on the customer's own assets nor evi- dence of the business earnings obtained. A common practice among clients was to transfer money by way of loans, at times repaid within an exceptional short pe- riod of time, according to the FIAU. One client was able to trans- fer over $3 million in the form of a loan to an external com- pany, while another customer received over €1.9 million from an "ulterior bank customer" in accordance to a loan agree- ment, for the vague purpose of supporting the company with all costs, liabilities and advanc- es. Having received 239 million Emirati dirhams from one of its beneficial owners, this cus- tomer then transferred €68.5 million to another customer at Pilatus Bank, with the declared purpose being that the transfer was a loan repayment to the beneficial owners of this other customer. Weirdly, one customer was provided with a $6.5 million loan from Pilatus Bank itself, as secured by its own funds. The bank did not even question the reason for requesting such a loan, as opposed to just using one's own funds. The economic rationale becomes more doubt- ful when one considers that the customer was to incur interest on the funds borrowed, and could not make use of its own funds. If that wasn't enough to cast doubt on Pilatus Bank's inter- nal transaction scrutiny, an- other customer received $1 million from another entity. Pilatus Bank tried to obtain in- formation from the customer, but allowed the transfer to take place despite its requests going unanswered. "More worrying- ly, the bank misled another lo- cal credit institution as it made it believe that it had all the nec- essary supporting documenta- tion at hand when this was not the case," the FIAU said. Another customer received over €11.9 million and $5.45 million from its beneficial owners, then remitted approx- imately €6.6 million back to the same owners. The transfers weren't substantiated with any form of documentary evidence, the report says, not even an explanation as to the rationale behind these transfers. While not mentioned in the report, both former chief of staff Keith Schembri and Nex- ia BT managing partner Brian Tonna held accounts at Pilatus Bank, making use of a similar loan arrangement to transfer money. Schembri received two pay- ments totalling €100,000 in his account held at Pilatus Bank, with the funds originating from Tonna's BVI company Willerby Trade Inc. This was first alleged by former Opposi- tion leader Simon Busuttil back in 2017, who claimed that the €100,000 payment was a kick- back transferred between the two from the sale of Maltese passports to Russian nationals. At the time, Schembri insist- ed that this €100,000 was a pay- ment to settle a loan. Howev- er, when Schembri and Tonna testified in a separate inquiry, they said that they didn't re- member how and when the money was passed, but they passed on three documents de- tailing the loan agreement and assignment. During the Nexia BT court sittings in March, the prose- cuting inspector cast doubts on whether the loan was need- ed in the first place. Schembri and Tonna's version of events was that the loan was secured because Tonna was worried about finances, but the inspec- tor pointed out that Tonna had deposits, cheques, and cash running into the thousands. LUKE VELLA NATIONALIST MP Jason Azzopardi has been sued for libel in a Bulgarian court by the owner of the shuttered bank Satabank, Christo Giorgiev, over a speech he had made in parliament. Azzopardi received the sum- mons from the district court of Varna, where Giorgiev is suing him for the sum of 50,000 Bul- garian Levs (€25,000). Maltese MPs have parlia- mentary privilege and protec- tion from libel in the House of Representatives, a privilege that extends to the press that reports their speeches. But a SLAPP lawsuit from another state, and an EU member at that, is unprecedented for a Maltese MP. Azzopardi had claimed in the House that Georgiev was un- der investigation by the Lux- embourg financial intelligence unit over money laundering and corruption, and that he was close to the Russian mafia. Azzopardi had also said that the Maltese FIAU had received a 300-page report from their Luxembourgish counterparts on Georgiev. Georgiev has denied these claims and said he will pres- ent witnesses in court to that effect. Georgiev accused Azzopardi of casting doubt on his integ- rity, which had affected his au- thority as well as his "emotion- al state" apart from creating reputational problems for him and his business. "As a result of the (Azzopar- di's) allegations, (Georgiev) has long had problems with his concentration in relation to his daily business affairs. He was often angry or very upset, and these conditions continue to date." In October 2019, the Malta Financial Services Authority (MFSA) ordered the bank to stop its operations after the Eu- ropean Central Bank suspend- ed its licence. Millions of crim- inal proceeds were suspected of having passed through the St Julian's bank. Azzopardi remarked that this was a first for a Maltese poli- tician, to be sued for libel in a foreign court, and that this was a warning for him and others. "This is the first time that a European politician has faced libel proceedings for a speech made in a national parliament." He noted that similar SLAPP proceedings had been opened against the Times of Mal- ta, Manuel Delia and the late Daphne Caruana Galizia in the past. SLAPPs, Strategic Lawsuits Against Public Participation, are used to silence and har- ass critics by forcing them to spend money to defend these baseless suits. "Let's reflect on the threat that journalism is facing in Malta, where there are some that are risking their lives for their work," Azzopardi said. He also noted that the rec- ommendations of the Caruana Galizia public inquiry empha- sised the need to safeguard journalism and that PM Rob- ert Abela is yet to implement them. The Nationalist Party ex- pressed solidarity with Azz- opardi and other journalists, who have or are facing SLAPP suits. "This was yet anoth- er instance of SLAPP tactics that Malta needed to legislate against, especially to protect journalists," said the PN. It said that Robert Abela had not yet implemented the rec- ommendations from the Caru- ana Galizia public inquiry, for the protection of journalists against SLAPP suits. Azzopardi himself had tabled a Private Members Bill on how to tackle SLAPP cases, but it was never discussed in Parlia- ment. Satabank owner files Bulgarian defamation case against MP Christo Giorgiev, left, at the 2016 inauguration of Satabank, shakes hands with former prime minister Joseph Muscat. Giorgiev has now sued Nationalist MP Jason Azzopardi over a speech he made about him in the House of Representatives

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