From ‘inept’ financial data to warring owners: inside Em@ney

Allegations of ‘inept’ financial administration, regulatory failures and endangering customer money are playing out in court as part of a war between two owners of a payment service provider.

Em@ney’s problems hit the news the following September Times of Malta reported that customers of the Ta’ Xbiex company did not have access to their money for several days.

A testimony from one of the shareholders shows that Em@ney handles approximately “€60 million” in customer funds.

The problems facing its customers appear to be the consequences of a years-long battle between Em@ney’s majority shareholder Oriana Moltisanti and its ex-CEO and minority shareholder Germano Arnó.

A slew of lawsuits filed by the warring owners have released confidential reports and letters from the FIAU, MFSA and the Sanctions Monitoring Commission into the public domain.

The reports document Em@ney’s alleged failure in 2019 to comply with anti-money laundering regulations, as well as more recent failings in the company’s governance structures.

Although Moltisanti cites these reports as evidence of Arnó’s mismanagement, Em@ney had vigorously disputed the regulators’ findings under his tenure.

Arnó, in turn, has accused Moltisanti of endangering the company’s operations and client funds by initiating a boardroom coup last year that ultimately saw him ousted as CEO.

August and the appointment of a new board of directors.

The former CEO did not respond to a request for comment.

Customer with alleged ‘mafia links’

Three years ago, Em@ney was fined €360,000 by the FIAU, an anti-money laundering organization.

A confidential FIAU report, submitted as evidence in one of the shareholder lawsuits, tells the backstory of that fine.

During an “unannounced” inspection in 2019, the FIAU found that the company’s customer base included high-risk customers who were the subject of negative media reports and “involved in financial crime.”

One customer was found to have ties to the ‘Ndrangheta mafia, a powerful criminal organization from Calabria, Italy.

In addition to several other issues identified by the FIAU, Em@ney was accused of failing to properly monitor high-risk transactions between certain clients, including two transactions worth a total of €3.2 million based on a “gentleman’s agreement ”.

As a result of the FIAU findings, Em@ney was also fined by the Sanctions Control Commission for failing to adequately screen its clients for sanctions.

At the time, Em@ney strongly refuted the FIAU’s findings, arguing that the reports’ methodology and findings were procedurally flawed. It also appealed the €360,000 fine.

A subsequent audit by the FIAU concluded last year that “tangible progress” had been made in improving Em@ney’s compliance with anti-money laundering laws.

However, the majority shareholder who recently ousted Em@ney’s management team has made it known Times of Malta that FIAU’s 2019 findings were “one of the key indicators that the previous directors and CEO did not properly manage Em@ney’s operations.”

“Similarly, the fine imposed by the Sanctions Monitoring Board in 2020 was another red flag… These sanctions reinforced the growing awareness that immediate corrective measures were needed to secure the company’s future,” said Rosario Fiorentino, advisor to Moltisanti.

‘Significant shortcomings’

The MFSA in September ordered Em@ney to stop taking on new customers until it ensures “good governance and internal controls” are in place to operate its payment services license in accordance with the law.

Court documents show that the financial regulator had long raised concerns about the company’s activities.

In a letter dated May 2021, the regulator noted “substantial shortcomings” at Em@ney.

The regulator said Em@ney had been operating without an approved anti-money laundering officer since November 2020 and had proposed unqualified staff for the two key roles of internal auditor and independent director.

Arnó appeared to exercise considerable power within Em@ney without the necessary checks and balances in place.

The minutes of the Em@ney board were deemed “inadequate” by the MFSA.

Despite Em@ney pushing back on many of the MFSA’s findings, the regulator warned in a December 2022 letter that certain “ongoing weaknesses” at the company had not been addressed.

Fiorentino claims that Em@ney’s majority shareholder was not informed of the concerns raised by the MFSA in 2021.

“The seriousness of the situation only became clear when Em@ney directors made public the follow-up letter from the MFSA in December 2022,” Fiorentino said.

Fiorentino said the December 2022 letter was only disclosed to the majority when Arnó’s team sought approval to appoint two new directors.

“At this stage, despite the lack of detailed information, it became clear that the company’s governance was seriously flawed and lacked both transparency and expertise,” Fiorentino said.

In response, the majority shareholder attempted to purge Em@ney’s entire board of directors, leading to an avalanche of legal claims and counterclaims from the two warring owners.

Arnó and his management team were ousted in August 2024, but the former CEO has claimed in court that the boardroom maneuvers were carried out “illegally”.

He has further claimed that these maneuvers put the company, which manages approximately “€60 million” in client funds, at risk.

Fiorentino disputes this. He says all legal decisions to date contradict Arnó’s claims that the majority shareholder’s action puts customers’ funds at risk.

“In addition, with the approval of the MFSA, the newly appointed directors will work closely with local authorities to safeguard the interests of clients.”

Fiorentino said that in his two decades of experience in the industry, he has never encountered financial statements as lacking in detail and substance as Em@ney’s under previous management.

A clean slate?

Fiorentino was nominated by Em@ney’s majority shareholder as one of the company’s new directors, as part of the boardroom coup.

The nomination must still be approved by the MFSA, which reviews nominations for key positions in licensed companies.

Italian media reports mention that Fiorentino is being investigated in connection with a €1.7 billion hospital tender in Italy.

He told Times of Malta that the case related to a “tender dispute” in which he was professionally involved.

“It has been reviewed by multiple courts, all of which have ruled that no crime or misconduct occurred on my part.

“Unfortunately, the Italian legal system allows investigations even after judicial decisions have been made.

“We respect the process and remain confident that this matter will be resolved positively,” Fiorentino said.

Fiorentino said that, to his knowledge, the MFSA is still processing his appointment as director.

“I understand that regulatory reviews take time, and I await the MFSA’s decision.”