De Marco says use of passport cash to buy BOV shares could be illegal

The Nationalist Party’s spokesperson for finance Mario de Marco has demanded clarifications by the government on the use of cash from citizenship sales, for Bank of Valletta.

De Marco is saying the decision to buy shares in Bank of Valletta using this money is a breach of the IIP rules and said the PN will demand an investigation by the Auditor General.

The National Development and Social Fund, which manages the tranche of 70% received from Malta’s sale of passports to the global rich, recently acquired a 2.91% share in Bank of Valletta through the recent rights issue.

But De Marco said the decision to use cash raised through the Individual Investor Programme for BOV shares raised a number of questions.

“According to Legal Notice 2/2015, the funds collected from the IIP programme were to be used for 12 specific purposes. The 12 specified purposes range from helping stakeholders deliver social, employment and educational projects, to fostering initiatives that support better governance, and to initiatives for the improvement of health and care for the elderly.

“These twelve specific purposes do not allow for the purchase of shares by government. By using funds collected from the IIP for the purchase of shares in BOV, the government went against the provisions of the above mentioned legal notice.”

De Marco said the matter was further compounded by the fact that the government has a vested interest in BOV, it being a significant shareholder in BOV and appoints its chairman. 

Government’s defended its decision by stating that in terms of the Legal Notice it is “obliged to undertake initiatives for the benefit of future generations”.

But De Marco said the purpose of this clause was to allow the fund to be used to support and finance projects that have long-term goals.

“The purchasing of shares falls beyond the definition of ‘undertaking initiatives for the benefit of future generations’. Government however used this clause to award itself unfettered powers to spend the IIP money as it so wishes and then justify its actions by stating that it ‘benefits future generations’.”

De Marco said the government had kept this course of action hidden from the public eye.

“No public announcement was made by government or BOV. Yet again it is thanks to the media that the taxpayer found out about government’s action. The Opposition is calling on government to publish all the correspondence and documentation relevant to this expenditure including the cost benefit analysis that was done to ensure that this public money was spent in the best possible manner. If government fails to publish this documentation then the Opposition will call on the Auditor General to investigate this expenditure.”