BICAL heirs again denied over Excelsior share transfer

Never-ending saga of almost 30 years by Pace to challenge Italian’s acquisition of MEH shares back in 1972

The Excelsior hotel
The Excelsior hotel

The heirs of the BICAL group of companies have lost an appeal on a 2014 court decision in which they challenged a share transfer from the company Malta & Europe Hotels (MEH) to an Italian businessman, for the ownership of the original Excelsior Hotel in Floriana.

The Excelsior is today owned by a foreign business group, but the claim in court concerns the alleged transfer of the hotel in 1972 by Italian owners Antonio and Nada delle Piane Ghidoli, to Italian businessman Massimiliano Martone.

BICAL owner Cecil Pace has always claimed that prior to his October 1972 arrest and the suspension of his BICAL bank licence, he had acquired the Ghidoli shares in MEH.

Earlier this month, the Paces lost an appeal in a saga of court cases to reverse a 1997 court decision that recognised Martone as the sole shareholder of MEH.

Pace had insisted that Martone had fraudulently obtained the signature of the Ghidolis on a share transfer signed right before his 1972 arrest and later ratified by the MEH directors, during which he and his brother Henry were being charged on misappropriation.

Pace has always protested that after his bank’s licence was suspended, his entire business group was taken under government controllership, to have its assets sold and pay all liabilities and bank depositors.

Pace’s claim was that he had acquired debts owed by MEH from a London financier, Gusex, and that he intended converting the debt into shares with his 1972 agreement with the Ghidolis.

But in 1997, a court recognised that this alleged ‘share transfer’ – which it dubbed a promise-of-sale – was never officially registered or ratified by the MEH board of directors. It turned out that Martone had intervened to acquire the Ghidoli shares, and was later recognised as such by the government-appointed BICAL controller, and MEH controller, Karmenu Mifsud Bonnici.

In 2000, Pace requested a new hearing of the case, claiming Martone’s testimony had been fraudulent, uncorroborated, and even contradicted by Nada delle Piane Ghidli herself, who in an affidavit insisted she had sold her shares to MIDC in 1972. His request was denied.

Subsequently, another case was filed in 2014, to convince the court that the MIDC share transfer was valid. But the courts have always insisted that the MIDC share transfer was never finalised or ratified by the MEH board of directors, and that the title of ownership claimed by the Paces was “defective”.

The appeals court last week once again insisted that the heirs had failed to prove their claim that the 1972 share transfer to Martone carried the forged signature of Ghidoli, and that they had failed to summons Mifsud Bonnici, as controller, to testify on the Martone share transfer. The appeals court upheld the 2014 decision, once again insisting that the share transfer to Martone, as recognised by the BICAL controller, was still valid.

The controversial suspension of the BICAL group is an ongoing saga that left Cecil Pace fighting for the return of his business assets for all his life until his death at 89, in 2017. While government controllers were tasked to sell as many assets as necessary to pay off all BICAL bank depositors and debtors, the process remains dragging to this very day.

Pace has always insisted that the controllers – private auditors appointed by the State – did their utmost not to sell the assets, claiming exorbitant fees each year, or selling off profitable assets at suspicious, if not vindictive cut-price deals that decapitated his business group.

A main shortcoming was the inexplicable inability by controllers to sell off the  profitable BICAL companies, and settle all outstanding bank debts and depositor claims in one fell swoop.

For example, in the case of MEH, the hotel company had Lm1.8 million in cash in 1978, enough to settle a Lm500,000 loan it held with BICAL for the controller, now Emanuel Bonello, to relinquish the company to its owner.

The controller did not, and instead retained the hotel, using up its cash reserves by way of annual controllership fees, and then selling off the dilapidated Floriana hotel to a foreign buyer for some Lm2.5 million in 1991.

The cash was used to settle Lm219,000 in tax arrears, but then the controller – wearing both hats as controller of Bical and MEH – took a full seven years to settle the BICAL loan, ostensibly acting as creditor on one side and debtor on the other.

The Pace heirs today are lawyer Malcolm Pace, Dr James Pace, Ian Pace, Christine Podestà and Rachel Zammit Tabona. Michele Martone and his siblings were represented by Mario De Marco.