BOV must face shareholders over Deiulemar, Labour MEP Alfred Sant says

Labour MEP Alfred Sant joins call backing shareholder demands to have BOV directors field questions during physical AGM

File photo
File photo

Labour MEP Alfred Sant has joined the chorus of disapproval for Bank of Valletta’s plans to avoid a potentially embarrassing and very public fall-out with its shareholders. 

Sant said BOV had to hold its AGM and said complaints by independent candidate Arnold Cassola and his insistence on a physical AGM for shareholders to explain the Deiulemar fiasco, were “spot on”. 

“On all counts, BOV directors have got to show they are accountable and not hide behind the screen of COVID-19 restrictions that no longer apply, in order to avoid an open tit-for-tat public discussion with their own shareholders,” Sant said. 

BOV had to fork out €182 million in an out-of-court settlement with Italian bondholders of a defunct shipping company that used the Maltese bank to hive off its monies in a trust. 

Cassola, a shareholder in the bank, protested that the directors were using COVID-19 as a cover to hold a remote AGM, with questions submitted to it in writing beforehand. 

Alfred Sant however agreed with Cassola’s complaint. The Labour MEP said that BOV had been labouring under problems stemming from the fall-out of the 2008 financial crisis, the pressures from anti-money laundering rules, European Banking Union strictures, and digitisation investment. 

“But some of the big problems it faces have been self-inflicted,” Sant said. “The board cannot continue to function with business-as-usual approaches and not explain face-to-face with shareholders how/why/when things got out of hand... and where the responsibilities for what is happening lie,” he said on Facebook. 

“Skimping annual general meetings is no way to run a business, especially when shareholders and depositors have been – still are – so badly mauled by how the bank has operated in past years.” 

BOV has said it will not face the public in a physical annual general meeting, to stick to original plans to hold a remote AGM for a third successive year, despite calls for management to clearly explain its role in the Deiulemar litigation

In an email exchange, BOV chairman Gordon Cordina said preparations for the AGM had been ongoing for months and that the decision was taken prior to the announcement of removal of COVID measures. 

Cassola initially asked Cordina to revise the 2 June AGM, to allow shareholders to speak to directors over suspicions of financial mismanagement that culminated with the Deiulemar €182 million settlement, half of the original €363 million claim

Shareholders will be unable to question directors about the settlement in a remote setting, with questions having to be sent in beforehand, in writing, with no opportunity for follow-up. 

Cassola replied that the bank had duped shareholders, and that it would use the remote AGM to “divide and conquer” shareholders. “The bank cannot get away with answering questions in writing. Present and past chairmen and directors have to be physically present in a public and open meeting,” Cassola said. 

Cassola said that he and other shareholders wanted answers and explanations on the due diligence proceedings done in relation to the 2009 decision to open the Deiulemar trust; and issuing misleading statements to shareholders, who will foot the €182 million litigation bill, while bank directors from 2009 onwards “did not forfeit one cent of their emoluments”. 

According to the bank’s rules, executive directors can have their remuneration reversed for up to seven years from their date of assessment in cases related to a failure of risk management, among other things.