Issue link: https://maltatoday.uberflip.com/i/817563
maltatoday, SUNDAY, 30 APRIL 2017 15 Interview Pilatus Bank chairman Seyed Ali Sadr Hasheminejad has defended his bank's anti-money laundering setup, but is tight-lipped about the possibility of being host to accounts for local PEPs and foreign kleptocrats big Four in Malta, including KP- MG, PWC, Deloitte and Ernst and Young. We have relationships with all of them. We have relationships with a lot of law firms, not only lo- cally but across Europe. It is nor- mal for any bank to operate that way today, because you need their expertise. When we came to Malta, it was important to find an advisory firm to go through the licensing pro- cess and the licensing process is a lengthy, rigorous, strict process, and it takes years. Saying 'oh the application was submitted on this day and licence was granted on that day'. They only look at that period of time. They don't know what has gone into that application. It takes sleepless nights to put that appli- cation together. You have to justify your business plan, how it's going to work, who is going to make it work, what's your governance in place, what's your compliance in place, what kind of advisory ser- vices you need, what kind of en- gagement you have to have, what kind of core banking...it's setting up an enterprise before having the enterprise. That's the process and the process has to be like that to ensure that when the bank opens it can cater for the management of its risk. The regulator, the MFSA has come out strongly in the past couple of days and defended the licensing process and you can't get a stronger statement from the regulator defending the granting of a licence. But the public doesn't know that and I believe it's your job to inform the public that that process needs someone like KP- MG involved, because it's a rigor- ous process and needs the people who know this stuff to get involved and bring the right elements and resources to make sure that that licensing process is prudent, it's strict, rigorous and at the end of it – there are no guarantees." This process started in 2011, 2012, and it takes years. And back then there was another govern- ment in power. When the licence is granted, and it's not granted to an individual but to an institution, there are many pre-licensing conditions that you have to meet prior to getting into operation. Then there are post- licensing conditions that you have to meet. Then you have to meet all the laws and regulations as you go live. And that is rigorous. Yesterday the leader of the Opposition made a statement saying that Pilatus Bank was used for a money transfer from a Panamanian offshore account to the PM's chief of staff. The upshot of this is that you're accused of either enabling kickbacks or suspicious payments. How do you respond to that? First of all, I'm bound by the confidentiality laws, not only to protect the institutions but also to protect the public... I cannot dis- cuss any specific case. But what I can tell you is this: the bank goes above and beyond, and I keep mentioning this, to make sure that it has the right compliance frame- work in place, that it follows the right AML procedures. But, if notionally speaking, PEPs were to hold accounts doesn't this mean that the procedures have failed, that the procedures are not strong enough? I can't talk about something hy- pothetical here. The driving fac- tor here is that there are laws and regulations that we are bound to follow and that's what we do. Like every other bank, we're bound by these laws and these laws call for certain things that the banks have to do. Such as report suspicious transactions to the FIAU? There's a host of things that we have to do. The reason I ask is because Mr Khangah had declared over €627,000 losses in a company that was closed down within less than 12 months, and which he paid off with a shareholder's loan. Is this not suspicious? We seem to be going back to the same thing. I can't comment. Earlier this week you were questioned at length by Magistrate Bugeja in the inquiry. In the broad strokes what was discussed? Pilatus Bank voluntarily made itself a witness for the purposes of the inquiry. It is not the subject of the investigation. We covered a lot of ground. I cannot get to the spe- cifics... but I can tell you that in the five hours I was there we talked about the many things that we, as a bank, made ourselves witness to. This is the entire bank. This is the entire IT core system which is a massive thing in itself. All the records, all the papers, they were just given to the inspectors by the magistrate's order. There is a lot and it's natural for this process to take the time it deserves so that we can get to the bottom of this, to find out whether those accounts were opened, those ac- counts were held, those transac- tions were done… this is a lengthy process but I want to say that I have so much respect for those men and women of the inspec- tion team who worked around the clock over the weekend to get to the bottom of this as fast as pos- sible." How has this scandal affected the bank and how do you see it recovering? The bank is open. The scandal has not affected the bank's opera- tions. Everything is operating as normal and all that is in the past. What we need to focus on is the future. Malta is an amazing hub for banking. The stuff that's hap- pening. Let's get past this stuff and look to the future. For the first time in the history of this country, Pilatus Bank has ventured out and established a branch in London. It's your job to make sure people out there know this. We're putting the Maltese flag on the private banking map. This remains a Maltese bank, with its future legs in London... this shows commitment. That Malta can be that next private banking hub and the next global financial hub and we have shown it. We can go out and establish and operate a branch and carry the name, the great name of Malta abroad. (Interview was carried out before the whistleblower – a former Pilatus Bank employee – testified before the inquiring magistrate on Friday afternoon.) PHOTO BY JAMES BIANCHI