‘No government ever sat down with National Bank shareholders to discuss compensation’ - heir

No government ever discussed proper compensation with the shareholders of the National Bank of Malta after the bank was nationalised in 1973, according to one of the heirs.

Jeremy Cassar Torregiani, whose great grandfather founded the bank after World War II, said no government ever bothered to “sit down with shareholders to determine the value of the bank”.

The National Bank was nationalised after a run on its reserves in December 1972 by depositors that were spurred by massive withdrawals from government-owned companies. The Central Bank had refused to act as a lender of last resort and eventually shareholders, many of them linked to Malta’s old nobility, were forced to sign over their shares to the government, without compensation.

The government went on to create Bank of Valletta on the ashes of the NBM.

Last month, the court awarded 82 NBM shareholders and their heirs compensation to the tune of €111 million after it found their rights were breached when the government took over the bank without compensation. The judgment is being appealed by the government and the heirs.

The heirs had submitted a claim for €325 million in compensation with the government arguing NBM’s shares were worthless when it stepped in.

Speaking on TVM’s Xtra last Monday, Cassar Torregiani said the only form of discussion held was with former minister Austin Gatt, who had offered compensation at a time when government was trying to sell its shareholding in Bank of Valletta to Deutsch Bank.

“However, Austin Gatt refused to put down the offer in writing and nothing ever came of it,” Cassar Torregiani said.

He went on to explain how businesses that had loans with the NBM at the time when it was nationalised were deemed to be unable to pay back their loans by the government thus creating a financially unsustainable situation.

“However, these businesses went on to prosper and grow in subsequent years,” Cassar Torregiani said, suggesting that the crisis was engineered by the government to have a pretext for the forced takeover of NBM without awarding compensation.

“NBM was not bankrupt… it had 25% of its reserves with the Central Bank of Malta but the government had refused to allow some of those reserves to be released to cushion the impact of the run,” Cassar Torregiani said.

A long-standing vocal campaigner for justice with NBM shareholders, Cassar Torregiani insisted he did it because he “loved his family and his country”.

“I wanted to do good for my country and the first thing to do is to search for the truth; that is what kept me going all these years,” he told programme host Saviour Balzan.