‘Trouble at MFSA’ led to delays in bond approvals, finance minister says

Delays in the reviewing and adjudication of bond issues will be dealt with imminently with the appointment of a new board of governors at the Malta Financial Services Authority, Finance Minister Clyde Caruana revealed. 

The interview with Caruana was published in BusinessToday.

The MFSA’s Listing Committee had not met regularly since mid-2020, leaving accountants, financial services providers and firms bemoaning the fact that applications to issue bonds were taking ages to process, and leading many companies to actually withdraw their applications.

Now, with a new board of governors appointed on Tuesday, things look set to take a turn for the better, with the listing committee soon to start meeting again to review applications.

“With the trouble and issues the MFSA faced last year, we felt we needed to focus on appointing new board of governors... And now that the board is in place, other bodies and services within the MFSA will soon be re-instituted. Amongst these will be the listings committee,” Caruana said.

A spokesperson for the MFSA, contacted a few days before the new board of governors was appointed, confirmed that with a new board of governors, bond applications would soon start being processed.

“The MFSA Board of Governors is the Listing Authority for the purpose of the Financial Markets Act (Cap 345),” the spokesperson said. “The Board of Governors is in the process of being constituted in terms of the MFSA Act Cap. 330”

CEO resigns

In November last year, MFSA CEO Joseph Cuschieri had resigned after it was revealed that he had flown to Las Vegas with businessman Yorgen Fenech in 2018. Caruana had then accepted his resignation.

Cuschieri had initially suspended himself after it emerged that he and MFSA general counsel Edwina Licari had travelled to the US in May 2018, on invitation by businessman Fenech, the alleged mastermind in the murder of Daphne Caruana Galizia. Cuschieri said he had travelled with Fenech to advise him on regulatory matters.

Following an inquiry led by Chief Justice Emeritus Joseph Azzopardi and Dr Mark Simiana, the MFSA’s board of governors ratified Cuschieri’s resignation.

Bond applications withdrawn

Premier Capital plc, the developmental licencee for McDonald’s in six European markets, announced in August that it had submitted an application to the MFSA’s listing authority requesting the admissibility to listing of €20,000,000 Premier Capital p.l.c. 3.75% unsecured bonds 2026, with a nominal value of €100.

Part of the proceeds of the proposed bond issue were to be utilised to finance the acquisition by Premier Capital BV (a Premier Group company) of the remaining 10% minority shareholding in Premier Capital SRL (Premier Capital BV is the 90% shareholder of Premier Capital SRL, which latter entity is the 100% shareholder of Premier Restaurants Romania SRL, the operator of the Premier Group’s McDonald’s restaurants in Romania).

But Premier Capital had to withdraw its application for authorisation for admissibility to listing.

In a company announcement issued by the Malta Stock Exchange, the company claimed it had withdrawn its application for the latest bond issue “due to unforeseen delays in the relative regulatory approval process”.

New board of governors

Now, operators in the financial services sector are hoping that with the appointment of a new board of governors the MFSA will get its house fully in order.

Prof. John Mamo was reconfirmed chairman of the MFSA while former finance minister Edward Scicluna, now governor of the Central Bank of Malta, was appointed as member ex officio.

The other five members on the board are Philip von Brockdorff, head of the University of Malta’s Faculty of Economics, Management and Accountancy, Mark Galea, head of the public finance unit at the National Statistics Office, Charles Zammit, formerly a member of the MFSA’s Board of Management and Resources, Economist Stephanie Vella, and Carmel Cascun, a lawyer.

These appointments are valid for a period of one year with effect from 4 February 2021.