Clients of Satabank are still awaiting funds approximately eight months down the line since its accounts were frozen by the Malta Financial Services Authority (MFSA), this newspaper has learnt.
The move came after a joint inspection and audit by the MFSA and the Financial Intelligence Analysis Unit (FIAU) found shortcomings in the bank’s anti-money laundering procedures.
Ernst and Young (EY) was appointed to administer the bank’s assets in “the best interests of depositors”.
Speaking to this newspaper, a number of industry insiders noted how – eight months later – they are seeing things “moving at a much slower rate. We cannot understand what has happened, but we are speaking up and chasing them every day.”
They maintain that whilst they are being told by the bank that everything is fine, the payments have “slowed down dramatically” in the last couple of months in contrast to the “steady flow at the beginning”.
With regard to why this is happening, it was explained to them that there might be other checks that need to be carried out but, in reality, no other information has been asked of them.
“There are even a number of individuals who have resorted to trying to contact the Prime Minister in an effort to get this situation resolved.”
One account holder said that he was being left “pretty much in the dark”, and had not been given a timeline or deadline of sorts to be able to tell his clients when they will be getting paid.
Communications from their website show ‘customer updates’ explaining scheduling for customers who wish to book an appointment or go to the bank. In the past three months there have been three updates with information and dates for customers.
Payments and potential investors
After contacting the first group of personal customers in December, Satabank said that a significant number of deposits had been returned and that they would continue contacting customers on a staggered basis as part of the controlled release of funds in January.
A hardship fund intended for Satabank corporate clients has also been established by the government, intended to deal with the businesses’ critical expenses such as wages – the last time some businesses paid in wages was in September, before the accounts were frozen – taxes, rent, water and electricity, so that they could continue operating.
Following that, BusinessToday reported that the bank’s corporate customers began receiving their funds in January and that, since then, there has been little news apart from a new group of investors having shown an interest in purchasing Satabank in April.
It was also said that the fees meted out by EY made sense in the preliminary stages, but in the long term would have led to the collapse of Satabank and that, once the new owners took over, the costs would be much more reasonable.
Some companies even went so far as to take the issue to court, with Juanafil Finance Ltd filing a sworn application in the First Hall of the Civil Court against Satabank, Ernst and Young (EY) and the Malta Financial Services Authority (MFSA) in December 2018, demanding the return of some €62,864 frozen amongst the bank’s assets.
The company said it had never been notified, directly or through public means as stipulated in law, that there were any reservations about the operations of the bank that would have caused it to be alarmed.
Therefore the directive to freeze the bank’s assets, imposed from one day to the next by the MFSA, had a prejudicial effect on the company “which could have easily been avoided by giving the company adequate time to make alternative financial arrangements”, it said.
Italian investor Davide Maria Di Maio and his brothers Sergio and Alessandro filed a judicial protest against Satabank, Ernst & Young and the Malta Financial Services Authority in January of this year following the freezing of their assets last October.
The Di Maio brothers, directors of Dream House Malta Ltd, claimed that their account in Satabank is necessary to their business.
The brothers claimed that this had caused financial problems for their company to the point where they had had to terminate the contracts of several employees in both Malta and Italy since it was not possible to pay them on time.
Di Maio asked Satabank to unfreeze the assets and pay damages, including interest, by way of compensation.
The Times of Malta had also reported that billions of euros in suspicious transactions through Satabank were under investigation, including suspected links to fuel smuggling, drug trafficking, the Mafia and blacklisted countries that made “previous cases of money laundering through a Maltese financial institution look like child’s play”.
These tens of billions of euros in transactions had passed through the bank during its four years of operation, and investigators believed that half of these may have been “high risk and highly suspicious”.
When contacted by this newspaper, the MFSA said that “the controlled release of funds is proceeding according to plan subject to KYC (know your clients) checks and other due diligence reviews including the receipt of pending information from the account holders themselves.”