The second slaughter of the innocents

Government and MFSA must assume their political, social and legal responsibilities and protect BOV investors.

Evarist Bartolo 13 June 2011, 12:00am

4 min read

The top people who run Bank of Valletta (BoV) feel deeply offended and accuse me of making inflammatory and untrue statements when I defend those who have lost hard earned money in the La Valette Multi Manager Property Fund.

The way this fund was run, the way naïve and vulnerable investors were enticed to put their money into this fund, the way well connected individuals in the bank got out of this fund unscathed before it collapsed, the way BoV is now trying to give hard hit investors meager compensation and the way the Malta Financial Services Authority (MFSA) is allowing all this to go on, is totally unacceptable. For saying all this, those who run BoV accuse me of potentially causing damage to Malta’s largest financial institution. Those who run BoV seem quite capable of damaging the bank without any help from me.

A former top bank executive, Anthony Curmi, while distancing himself from my remarks, had this to say on BoV in The Times a few days ago: “Independently of all this, I have to say that, based on my familiarity with a totally different case of alleged mis-selling by the BoV Wealth Management, not all is rosy in BoV’s garden. This particular case has been under investigation by MFSA for over one year but, so far, BoV has refused to see reason. This particular case, in my opinion, is clear-cut. It is certainly uncomplicated compared to the property fund saga. Yet, the complainant (a widow, to add insult to injury) is still waiting for justice to be done, with BoV seemingly opting for the possibility of inducing the person concerned to institute costly and protracted court proceedings. A David and Goliath scenario can never do well to BoV’s image apart from the fact that this demonstrates question-able business ethics and morality.”

Since I spoke out on the BoV’s mishandling of the La Valette Multi Manager Property Fund, other people have contacted me and told me how shabbily they have been treated by this bank. I have been invited to go to the BoV “to be properly informed on this matter.” I look forward to being briefed by BoV but first I want them to treat their investors decently and give them back all the money they made them lose by getting them to invest in this fund.

In the last few days BoV’s army of salespeople have been contacting the investors and making extreme pressure on them to accept immediately their meagre offer of compensation. BoV people know that MFSA’s decision is imminent so they are making desperate attempts to get signatures from clients before. In the meantime, MFSA take their time to give BoV all the time in the world to get out of this mess as cheaply as possible.

Government and MFSA must assume their political, social and legal responsibilities and protect the investors. Government (as main shareholder appointing BoV chairman) and MFSA as regulatory body with all powers to direct and instruct) must tell BoV that it is in the wrong and stop causing further damage to the financial services industry, to Malta, to clients and indeed to its shareholders. See how its share price has fallen about 33% in the last few months. There are strong rumours that MFSA’s first investigation report should be out tomorrow or the day after.

This might party explain why BoV’s army of salespeople is making immense and desperate pressure once more (the first time was when they sold this professional fund to retail public, mostly vulnerable elderly pensioners) to accept immediately their compensation, even before the first report is out. We are witnessing an attempt at a second slaughter of the innocents.

Ten days ago the Partit Laburista (PL) appealed to the BoV to respect its clients and withdraw its meagre compensation offer till MFSA completes its three investigation reports so that the investors would be able to take an informed decision. BoV has ignored this appeal. MFSA is also abdicating its responsibility and betraying its mission by failing to protect the investors. The PL has always worked in the national interest and has worked hand in hand with the PN government to build the financial services sector in Malta. But the PL is right not to allow this national consensus to turn into omertà and a conspiracy to let down many vulnerable people who have lost hard earned money by being made to invest in a shady fund through dubious and unethical practices.

Evarist Bartolo is Minister for Foreign Affairs

More from Evarist Bartolo

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Try this: http://archive.maltatoday.com.mt/2003/bical.html

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Min semma' l-BICAL

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I would advice all BOV customers of BOV to beware. I have been a customer of BOV for many years but lately it seems that whoever is running this bank thinks that people are stupid. Besides being one of those who stupidly invested in the La Vallette Manager Property Fund I am noticing other innapropriate banking methods such as the statements BOV used to send to it's customers on a monthly bases for credit cards accounts. A couple of months ago this service was terminated and one has to make use of internet banking to view his or her statement. Recently an elderly person who is computer illeterate was not certain of the ammount left on her account and went to the benk to enquire about it. She asked the clerk for a copy of the statement but the answer was that it is not possible for the bank to issue a statement and was told that the clerk could not even show it to her on his monitor. Apparently this clerk realised that the woman in front of him could not use a computer so he ended up reading the details for her. I smell something fishy here which I doubt if it is in compliance with Hman Rights Law.

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Interesting article with one major flaw - if politicians are to be taken seriously then before issuing statements of this ilk they should at the very least seek to evaluate both sides of the events that led to this situtation and then be at liberty to express their opinion. Clearly, Hon Bartolo's article is a reflection of a number of allegations in the media. What surprises me, is that Mr Bartolo has not deemed it appropriate to seek the views of BoV before issuing such a statement but rather is making this a conditional event - pay out and then explain - rather disappointing from an educator and a seasoned politician who should know otherwise. The article even goes on to state that BoV's share price has fallen 33% - well clearly Hon Bartolo this was primarily due to the bonus issue announced by the Bank late last year and undertaken in January 2011 - where any one with a sense of financial acumen will appreciate that when bonus shares are issued the share price has to fall commensurate to the bonus shares issued due to a fall in the reserves of the bank to cater for the bonus shares. As for the Bank's standing in the local market, I feel that together with HSBC, the two longest standing Banks servicing the Maltese market, they have proved to be strong contributors to the growth of Malta's economy and the prudence of both Banks has led them to witthstand the market crisis in a laudable manner. As to BoV, the achievements and results achieved by the Bank, its social corporate initiatives, and its role in the economy are there for all to see, Hon Bartolo included. It was also interesting to note that the Offer made by BoV was not fully understood by Hon Bartolo as in effect, despite the Bank's expressed strong position on this so called gearing restriction, the main bone of contention between the MFSA and BoV, BoV voluntarily tendered this Offer to remedy this contention, rather than allowing investors to seek remedy in the courts of law which as we all have sometime or another experienced takes ages. In effect, the Bank has decided to compensate investors taking into perspective the MFSA's view on gearing. So much for the slaughter of the innocents!!! Honestly, does Hon Bartolo expect all Banks and financial institutions to compensate for investors due to a fall in the markets? Following the 2008 crisis, seasoned investors know that the value of their investments have not as yet reached the levels pre crisis. Hon Bartolo, have a look at the HSBC Property Fund and other International Property Funds through a simple internet search and you will find out for yourself. Lastly, let's stop slandering the Bank workers even going to the extent of accusing them of being freemasons and now of being slaughterers!! It is clearly my strong opinion that everyone has a right to express their views as long as these views are balanced and expressed with a degree of dignity.

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Dear warpath 2010, it came down to this then , being politely vulgar, still makes a person vulgar. i mentioned the other fund as a comparison and for your info, the accumulator does not pay out any interest. All I say is let's stick to the facts, state true facts only and be rationale. By the way, I am a her. Bye

Anthony Haidon •

With reference to HONESTY's blog I say to him or her 'If you don't like politics and politicians leave them out of this, it is you who is bringing them in. What about the expression Tfih ta tajn', The use of this expression seems to have become a National pastime and is used every time somebody says or writes something somebody else would rather not hear. I also suggest that you should not compare the fund in question with the one run by other large bank, the latter is ongoing and has never missed a day of interest. So here I could use another expression but I will not because it is too vulgar, there is the word lettuce in it, hass in Maltese.

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Honestly, as if we don't know that BOV under PN has turned the clock back to the pre-Barclays days; in terms of culture, meritocracy and blue- eyed buddies club? Stop taking us for fools please!

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Just a small correction to Mr Bartolo's remarks, the most evident, just to show how to be sure of all statements. Mr Bartolo says the BOV shareprice has fallen 33%. This is only true to the ignorant as he seems to NOT Know that there was a bonus issue in January that creates an effect of a falling price but compensated by an increase in shares. Please stop the half truths or distorted facts. Certain politicians seems to be experts here. If this simple fact cannot be reported well, immagine the other things being said.

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THEN, IT ALL RESULTS TO THIS, A HIDDEN AGENDA USING THE INVESTOR U TFIH TA TAJN. THE SAME MESSAGE COMING OUT OF ALL CONTRIBUTORS. AN ATTACK ON THE PRESENT GOVERNMENT USING INVESTORS AND ATTACKING MFSA AND BOV. THIS IS WORSE THAN WHAT BOV IS BEING ACCUSED OF AS THE ACCUSERS ARE USING INNOCENT PEOPLE AS SHIELDS. I THINK, FOR THE SAKE OF THE COUNTRY WE BETTER LISTEN TO BOTH ACCUSED AND ACCUSER AND STOP SENSATIONALISM. THOUGH THE BOV OFFER IS NOT REFUNDING ALL MONIES, IT IS PLACING INVESTORS AT NORMAL MARKET LEVELS (EVEN BETTER THAN THOSE WHO INVESTED IN THE HSBC FUND). I BELIEVE THIS HAS BECOME A PERSONALISED POLITICAL ATTACK AND SINCE I HATE POLITICS I BELIEVE THE TWO THINGS SHOULD NOT BE MIXED. I ALSO PRETEND BETTER FROM PUBLIC PEOPLE

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Prosit Evarist. They cannot be allowed to get away with it for the INTREST OF THE BANK. The criminal culture that has developed at BOV needs to be expunged. Too many politically appointed scum bags at that Bank. Not all rosy in the garden - the sewers are overflowing. Any idea of who would have to pay for the damages if BOV goes under? And this is were it will end sooner or later. I would have said this 10 years ago and i say it with more confidence in view of recent international events. Are you MALTESE ready to pay for the mess BOV can leave this country in? Think its only the property funds that smells of sewer water at this bank? Maybe this bank should stop taking orders from certain ministries and actually act in favour of its share holders and its clients for once. Yes - the shareholders - were are they in all this? The mistakes made by BOV have to be amended and its the shareholders will suffer for this bad management.

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Artiklu first class. Fil BOV hemm hafna hard selling tactics, u dan gara minn indu daahlet is sistema ta sales culture. Ma tatix tort lil impjegat is zghir ghax jekk dan ma jilhaqx it targets li dejjem ikunu fenominali, la joehu promotion, la jiehu zieda fil paga u barra minn hekk jispicca inwarrab. F kelma wahda il karriera tieghu tkun spiccat. Dan il hard selling ghandu jigi investigat mil MFSA. L impjegati kien jafu li xi darba se tfaqqa xi bomba imma had ma tkellem ghax malajr jigi imcanfar mil management. Issa il bomba faqqet f dan il fund. Jista kien hemm anki inside information u inside dealing li hi aktar serja. Nistennew rizenji mil bank mil kbarat wara dan il fiasco. Ta minn ifakkar li jekk haddiem imur short jaqlahha f sospenzjoni u anki demotion. Issa nisperaw li min hu responsabli ghal dan it telf jigi iddixxiplinat u jiehu li haqqu. Barra minn hekk il Mnagement tal bank ghandu jirrevidi sales cutlure tieghu biex dan il hard selling jispicca darba ghal dejjem