BICAL • November 2 2003

The BICAL saga in chronological order

An overview of some of the relevant dates and events
1962 – Brothers Henry and Cecil Pace open the BICAL bank. They are the shareholders and directors of innumerable companies spanning the whole economic spectrum – shipping, hotels, finance, manufacturing and motor vehicles. Cecil Pace is one of Malta’s foremost entrepreneurs. Together with his brother, the BICAL bank and its associated companies employ 3,300 workers. Even Dom Mintoff, Labour Prime Minister between 1955 and 1958, and later from 1971 to 1984, acknowledges Cecil Pace’s status. In the late fifties, with Cecil Pace on tow as a business representative, Mintoff would introduce Pace as a "successful industrialist," when on trips abroad to promote Malta.
1970 - Central Bank (CB) inspectors identify BICAL as being in a bad situation and exposed to great risk due to a shortage of liquidity, excessive loans beyond the bank’s means. The inspectors contend that these loans were concentrated on a small number of industries in which the president and one of the directors of BICAL had major interests, a practice not in conformity with banking practice. The CB report is corroborated by accountants Cooper Brothers Ltd, who suggest the appointment of a controller to regulate the bank’s dealings.
1971 - Labour is returned to power. Finance and Customs Minister Guze Abela gives orders for the immediate examination of BICAL affairs by Central Bank inspectors.
November 1972 – Cecil Pace gets to know through Hambros Bank that the credit limit in BICAL’s account of 360,000 pounds has been exceeded. Baffled, Cecil Pace calls for one of his managers: Lawrence Cachia Zammit, brother of former PN Health Minister Alexander ‘Sandy’ Cachia Zammit, and also treasurer of the Nationalist party. He admits to having made unrecorded foreign transactions of up to 360,000 pounds sterling, which were allegedly made to pay for printing equipment purchased by the Nationalist party apart from other personal payments made by Cachia Zammit in the expensive pastime of keeping racehorses. The bank appears to have never been repaid by the Nationalist party for the disbursements of foreign payments made through the Hambros bank. Cachia Zammit had in fact written a letter confirming the discrepancy of funds, and offering to make up for the missing funds by personally transferring property to Cecil Pace’s companies.
November 20, 1972 - Cecil Pace receives a telephone call from Robert (Bobbie) Stivala, Guze Abela’s private secretary. At 9.45 pm, Cecil Pace, accompanied by his lawyer Albert Ganado, drove to the Finance Ministry. The writing was on the wall, and Bobbie Stivala did all the talking: "From this time on, your bank is no more, I suggest you co-operate fully with the Central Bank." In the following days, BICAL encounters a run on its reserves. Guze Abela, Finance Minster, is one of the many depositors who make sure they withdrew all their monies from BICAL before the appointment of a CB controller to take over the bank – according to Cecil Pace the amount is Lm5,000, certainly no coincidence.
November 25, 1972 - A DOI statement announces the bank is to be closed for a time to allow for talks with the Finance Ministry. Central Bank manager RJA Earland appointed Controller.
November 28, 1972 – Karmenu Mifsud Bonnici is appointed BICAL controller to take over the bank’s and its associated companies’ assets and sell off as much as is needed to clear all the bank’s and its companies’ debts and liabilities. With his bank under control by Mifsud Bonnici, Mintoff’s right-hand man, Cecil Pace learns much about the motivations behind the closure of his bank. He cannot understand why the evident surplus of assets over liabilities threatens the closure of his bank.
January, 1973 - Two messengers bring home the reality behind the closure of the bank: at the newly-opened Excelsior Hotel, Justice Minister Anton Buttigieg candidly asks Cecil Pace whether he would consider taking on Mintoff as a business partner. Buttigieg suggests to Cecil Pace he transfer part of the bank that was later to be closed down, to Mintoff’s nominees. In return Cecil Pace would have the possibility to open new branches and to take over government accounts.
Cecil Pace had already been asked to accept to become deputy leader of the Labour party by Mintoff. An employer of 3,000, and a popular personality, Pace had the ability to garner great support for the MLP. "Not being politically minded, I rejected the offer. Soon I was approached again, this time with the proposal to sign away half my equities to nominees and be rewarded with ‘choicy’ contracts for my companies whilst my bank would be handling Government accounts and permits to open branches all over the island," Pace says.
January 5, 1973 - KMB asks Cecil Pace to sign the deal with Mintoff, or else face the consequences. The next day on 6 January 1973, Cecil Pace waited for the police to arrive, to be taken to Kordin.
October, 1977 – Following four years of imprisonment and house arrest, Cecil and Henry Pace are convicted for misappropriation, fraud and forgery. Cecil is sentenced to 14 years, and his brother 9. According to a Court registrar overhearing a telephone conversation between the presiding Judge and Dom Mintoff, it is Mintoff who gives the blessing for the maximum sentence allowed.
1985 – Cecil Pace is released from prison. He now has to face Karmenu Mifsud Bonnici then Prime Minister of Malta, appointed by Dom Mintoff himself. Cecil and Henry Pace initiate a series of legal proceedings into the mishandling of BICAL and its companies and the apparent reticence of Controllers to pay off the depositors at the BICAL bank.
November, 1995 – Parliament passes a law which grants immunity from prosecution to the BICAL Controllers, which stops the Pace court actions from being heard in Court and transferred the cases instead to a tribunal presided over by a Finance Ministry-appointed lawyer.
2003 – Fresh new allegations into the political intrigue behind the closure of BICAL are revealed in MaltaToday. Around 20 per cent of BICAL depositors remain to be paid, but the bank is still under control. BICAL Controllers are revealed to have squandered hundreds of thousands in BICAL monies to pay for their services, estimated to amount to over Lm2 million in 30 years. Cecil Pace, now 73, is still fighting for the recovery of BICAL monies to be given to the rightful depositors and the release of his companies from control.