MFSA CEO silent as Edward Scicluna would not meet ‘fit and proper’ rules

Central Bank Governor Edward Scicluna, facing criminal charges in court, would not qualify to serve on any financial institution board according to the ‘Fit and Proper’ guidelines issued by the financial services regulator, the MFSA.

Scicluna and other members of the previous administration are among those being charged with fraud and misappropriation of funds after a magisterial inquiry into the sale of three hospitals in Malta to Vitals Global Healthcare was concluded last week.

The Shift asked MFSA CEO Kenneth Farrugia to state whether Scicluna’s position was tenable given the MFSA guidelines, but despite repeated reminders, Farrugia did not reply.

According to the MFSA’s guidelines, anyone who is remotely accused of any criminal act is flagged in any due diligence and blacklisted from occupying any role on a board.

The ‘Guidance on the Fitness and Properness Assessments Applied by the Authority’, issued in July 2019 by the MFSA, says that those charged with criminal offences cannot serve until they clear their name.

“Where a person is subject or has been subject to legal proceedings, criminal or administrative, the Authority will inter alia consider the nature of the charges or accusations, the phase of proceedings reached, the expected penalty if a conviction ensues, alleged wrongdoing and if this is particularly relevant where action was taken against a legal person within which the person undergoing the fitness and properness assessment was involved in,” the guidelines state.

A financial services practitioner told The Shift that “no one with criminal charges is approved by the MFSA or the European authorities. It is obvious to everyone that Scicluna’s position is not tenable if he is a defendant in the Criminal Court”.

The 78-year-old former Finance Minister has gone silent since the news that he will face criminal charges in court. Among the accusations is his dereliction of duty in preventing the fraudulent Vitals deal from going through.

Edward Scicluna served as the government’s Finance Minister from March 2013, when the Labour Party came to power, until November 2020. He was then appointed governor of the Central Bank of Malta on 1 January 2021.

Apart from acting as the governor of the Central Bank on a €140,000 a year package, Scicluna represents Malta on the prestigious board of the European Central Bank (ECB) and sits on the board of governors of the MFSA, earning an additional €12,000 a year.

Scicluna also receives a handsome pension of over €40,000 as a former minister and another as a former MEP in Brussels.

This is not the first time Scicluna has faced calls to resign. In 2019, during the turmoil and scandals that embroiled the Labour government, Scicluna came under pressure to resign after backing disgraced former minister Konrad Mizzi in a parliamentary vote of confidence.

When questioned in court over his actions and claims that he was not part of disgraced former prime minister Joseph Muscat’s ‘Kitchen Cabinet’, a term Scicluna used to describe Muscat’s closest collaborators, Scicluna declared that he didn’t want to lose his €100,000 income.

So far, the European Central Bank has not reacted to Scicluna’s arraignment, stating that it is still following developments.