Jeremy Cassar Torregiani | Corinthia, BOV and the National Bank of Malta

People want to know why money is the only thing that matters and why people appointed to protect and uphold citizens from abusers seem to be the ones guilty of complicity

To stop the rot we’ve got to start somewhere and I think the Corinthia story offers us this opportunity. Whether we like it or not, we are all in this together
To stop the rot we’ve got to start somewhere and I think the Corinthia story offers us this opportunity. Whether we like it or not, we are all in this together

As part of the then public policy to boost the still developing tourism industry, the Maltese government had agreed in the early 1990s to grant a concession of land to the Corinthia Group to develop the San Ġorġ and the Marina Hotels.

The public land, given over for 99 years, had to be used only for hotels. A few years ago, the Corinthia Group also acquired the Radisson Bay Point Hotel from previous owners who had been given the same concession in the 1990s, for €33 million.

Corinthia now wants the government to withdraw the concession restrictions of the 1990s and instead allow it to build a maximum of 100,000sq.m. of residences and offices to speculate and sell them on an open market at prevalent market prices.

So who are the Corinthia Group and how did they start?

In a similar bid to start the tourist industry following the country’s independence in 1964, the private sector – through the National Bank of Malta – spearheaded initiatives to start the tourist industry so that Malta could start to earn its own living without subsidies from the British. The Corinthia was one such initiative funded by what was then the National Bank of Malta Ltd.

After the forced takeover of the National Bank group through Act of Parliament XLV 1973 by the Maltese government, the Corinthia Group started to deal with the newly formed, nationalised Bank of Valletta.

Government had then made the false claim that there was no value in the NBM when it was taken over, so no compensation was due to its owners and shareholders.

The accounts they invented (by appointing new auditors) stated that a number of loans – including that given to the Corinthia Group – were worthless and that they could never be repaid. Consequently, the government transferred all the assets, liabilities and the business of the NBM group over to the Bank of Valletta for free, and the bank resumed operations using the same resources as previously employed when it was privately owned.

After over 25 years in court (2001), the NBM shareholders managed to get the court to look at the accounts of Bank of Valletta to see whether this claim was actually factual, or in layman’s terms, whether the loan given to the Corinthia and taken away from the balance sheet of the NBM, was actually repaid or not.

A report ordered by the court and issued by Tonio Zarb of KPMG concluded that, as far as they were concerned, the loan could not be verified as repaid as the files were missing from the archives of Bank of Valletta!

I met with Corinthia owner Alfred Pisani on 3 January 2017 to specifically ask him whether he paid or not. He confirmed that he did pay every cent.

He asked me, however, to never make the claim again.

I asked him for an affidavit confirming what he had told me. He promised he would talk to his lawyers and get back to me. He never did.
If the loan granted to Corinthia was indeed repaid as maintained by the Pisani family, then the NBM shareholders are up to the tune of Lm1.6 million in 1973 value – circa €300 million today – and Bank of Valletta, which was falsely taken from them on the basis of these accounts, belongs to them.

If on the other hand, the Corinthia Group never repaid, then the question is why isn’t the government going after them to get its money back, and why are they negotiating yet another lucrative deal that will undoubtedly change the St George’s Bay area for all?

Simple logic dictates that the borrower goes bust before the lender and not the other way around. If the original loan was never repaid, yet wiped off the balance sheet of the NBM, then the government helped them to the detriment of the NBM. If it was repaid, then the accounts that justified the takeover of BOV for free are false and BOV belongs to the NBM shareholders.

You tell me: which one is it?

For various reasons people want answers. People want to know why our way of life has changed so much, why we live in such a fragmented society with no cohesion, why legal claims fall flat even when there are reasonable grounds to investigate.

People want to know why money is the only thing that matters and why people appointed to protect and uphold citizens from abusers seem to be the ones guilty of complicity. Moreover, people need to know why there seems to be so little respect for our environment and all the things that make us Maltese.

Both political parties are dirty and have many skeletons in their closets. My efforts here, however, are about the opportunity for those who want the truth, to use this case as an example and to get the honest answers. Unlike other “mysteries”, the companies concerned are in Malta. The people involved are all Maltese. The land and property in question is in Malta and can easily be traced.

To stop the rot we’ve got to start somewhere and I think the Corinthia story offers us this opportunity. Whether we like it or not, we are all in this together.

Jeremy Cassar Torregiani is a former member of the National Bank of Malta Shareholders Association.

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