The Maltese financial regulator has withdrawn the licence of Satabank plc, after millions of criminal proceeds were suspected of having passed through the St Julian’s bank.
Ernst & Young, the competent person appointed by the MFSA, remains in control of Satabank since it was granted full powers in October 2018 to oversee withdrawals from the bank.
“The Satabank case involved a great deal of forensic and analytical work apart from ongoing coordination between all the relevant authorities including the FIAU and Central Bank of Malta,” MFSA chief executive office Joseph Cuschieri told MaltaToday.
“The approach taken by the MFSA and FIAU with respect to the controlled release of funds ensured that suspicious funds were flagged and reported to the FIAU accordingly through STRs while funds which were identified as ‘not suspicious’ were paid.”
The controlled process for the return of customer deposits will not proceed further, save for various exceptions.
EY will continue to process customer files where complete information required for the return of funds process was received by 30 June 2020. EY will not be able to process files where pending queries remain outstanding as at 30 June, or new and additional information submitted after 30 June.
Customers who have been requested to provide payment instruction details by the competent person are to submit this information at their earliest but not later than 15 July.
Upon its appointment, EY collected data and carried out customer risk analysis as required for the purposes of understanding the assets and liabilities of the bank. A controlled process for the return of customer funds was carried out on the basis of analysis conducted by EY upon submission of documentation by customers.
EY also conducted customer reviews and where appropriate compiled and filed suspicious transactions reports (STRs) as required and responded to requests made by the relevant authorities including the FIAU and the Police.
The Financial Intelligence Analysis Unit had fined Satabank a reported €3.5 million for various regulatory breaches.
The police have since been involved, investigating what could be billions in euros which passed through the bank’s payment channels. All 12,000 of Satabank’s accounts were frozen by the MFSA, with controlled releases effected by EY.
This was the first time in Maltese banking history that the MFSA, in coordination with the Central Bank of Malta and the FIAU, had taken such action against a retail and commercial bank. The joint inspection is combing through each account to ensure that any questionable funds do not leave the Paceville bank.
Satabank offered an innovative online payment channel which allowed small peer-to-peer payments to be made. Prior to setting up in Malta, Satabank’s Bulgarian co-owner Christo Georgiev ran an e-money business in Luxembourg. A self-described pioneer of innovative payment solutions who has worked in the fintech sector since 2000, according to a biography on one of his company’s websites, Georgiev also owns Bulgarian iCard AD, and the Liechtenstein-based myPos AG.
Satabank has protested exorbitant rates it was being charged by the “competent persons” appointed to take control of its bank, in a formal protest lodged with the Malta Financial Services Tribunal. Satabank said it was paying members of the international team up to €689 an hour. “In the context of a small bank that is a Maltese-licensed and regulated credit institution, the above rates are exorbitant and unreasonable. [They] are clearly not in the interest of the bank, nor of its depositors, employees and shareholders.
“If such rates were to be maintained unabated, the fees of the competent person will inevitably deplete the bank’s capital…”