Ali Sadr Has A Case Against Malta
The businessman Sayed Ali Sadr Hashemi Nejad, who filed a complaint against Malta in the International Center for the Settlement of Investment Disputes (ICSID) of the World Bank, experienced in May his first small victory in the case. The arbitration institution determined that Sadr’s claims against the mismanagement of his bank by the Maltese financial authorities are legitimate. Pilatus Bank, owned by Ali Sadr, has been in a state of complete disability since July 2021.
In July 2021, Sadr filed his complaint through his company Alpene Limited, based in Hong Kong, which owns Pilatus Bank. He claimed that Pilatus Bank was wrongly closed by the Maltese authorities. Sadr alleges that the only justification that Malta had for removing him as bank manager was the accusation against Sadr in the United States for violating the United States sanctions on Iran. Sadr asserts that this case is fundamentally unrelated to his efforts with Pilatus Bank and that the charges in the United States are in reference to actions that allegedly occurred before Pilatus Bank was even founded. Furthermore, the case against him in the United States was eventually dismissed, so it was all based on unfounded accusations.
On 23 May 2022, the ICSID determined that Ali Sadr has a legitimate argument at least legitimate enough for the arbitration institution to continue with the proceedings. This does not only affect Ali Sadr’s personal situation. Currently, the bank’s assets, which include the accounts of the bank’s clientele, are frozen for several years. The judgment casts a disturbing light on Malta and its authorities. A red flag should be raised as to whether the decision to continue a case on Pilatus was made only to target Pilatus Bank and specifically Ali Sadr, without proper cause.
The claim that the Maltese authorities tried to use the Pilatus case as a scapegoat is not something new for the Maltese public. The case that the Maltese authorities created around Pilatus Bank was centered on the bank’s alleged lack of supervision over some transactions. Further inspections in the regulations that allowed banks all over Malta to make transactions with minimal occasional supervision show that the same authorities that accused Pilatus, are the ones who promoted these kind of deals.
Until recently, Malta was on the gray list of the Financial Action Task Force (FATF). A country cannot enter such a situation simply because of actions made by one bank. The Maltese financial authorities, namely the MFSA and the FIAU, fostered and promoted a culture of corruption within their doors, which was the main reason that these authorities looked at Malta in the first place. For Malta to reach a place where it is clean from corruption, these bodies must carry out internal inspections of their activities.
Malta had the eyes of EU financial bodies checking its dirty laundry, so the authorities felt forced to find a scapegoat. According to Sadr, Pilatus was chosen to fill exactly this role. The ICSID concluded that Sadr may be right in his statement that Malta targeted him personally.
Only time will tell if it is correct. What is certain is that the financial authorities of Malta have another reason to be worried at the moment.
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