Don’t turn your back on BOV investors, Finco reminds Busuttil

Finco Treasury Management director Paul Bonello has called on newly-elected Nationalist Party Deputy Leader Simon Busuttil to follow up on his previous complaints against the treatment of Bank of Valletta investors, who lost savings they had poured in investments.

In October, Bonello had unveiled a strong-worded letter penned by Busuttil directly to Prime MinisterLawrence Gonzi, where the MEP complained to the Gonzi that it was the government's duty to protect small investors.

In his letter, Busuttil had also questioned why the MFSA did not make use of its full powers to rectify damages suffered by clients following mistakes committed by enterprises.

Speaking to MaltaToday, Bonello said that now that Busuttil is in a position of power, he is obliged to follow up his pervious complaints with the tangible and affirmative action that his new authority now affords him.

Bonello was speaking in the wake of Busuttil's election as the PN's new Deputy Leader last Friday afterobtaining 72% of the vote - the successful culmination of a campaign based on change and reinvigoration in a bid to prepare the PN for the coming general election.

"Now that he has executive power, I expect that what he had seen as politically correct to complain against, he will consider politically correct to act upon," Bonello said.

Bonello has spearheaded an investors' campaign to recoup losses from investments made with BOV for the past years.

"Now it's a question of implementation. He doesn't need to write letters anymore. He can act on the issue directly himself," Bonello added.

"If he does nothing, he would have begun his office as deputy leader on a weak wicket," Bonello said, suggesting that any backtracking from his previous positions would immediately undermine his credibility.

"Up till now he didn't have executive power. He won everyone over through his aura of sympathy and charisma," Bonello said, insisting that now that Busuttil is in a position of authority, his sympathy and charisma alone will not suffice any longer.

However Bonello is cautiously upbeat. "He won me over too. I have complete trust in him. But now that he has power, he must use it well. If he doesn't take action to solve the issue, he will have to face the consequences.

Bonello added however that he wasn't piling his expectations on Busuttil alone, reiterating that he expects all stakeholders involved to do their part so that the investors involved are able to obtain redress.

"With regard to BOV, I expect that if the bank was given a commendation by the Malta Financial Services Authority (MFSA) to reimburse a client, they should honour it," Bonello. "With regard to the MFSA, I expect that a regulator hands out such commendations to BOV - of which there are dozens - it should ensure that these investors are reimbursed in full, and use its statutory power at law to take BOV to court if the bank does not respect them."

While he noted that the MFSA said it would be exercising this power, Bonello argued that despite these past assurances, the regulator seems to be dragging its feet on kicking off court proceedings.

"Many of these investors are rather advantaged in age. How long can they afford to wait around until the MFSA starts things moving in court for them to be reimbursed?" he asked.

Bonello also reiterated calls for the Government, as the 'entity' that oversees the MFSA and is also BOV's majority stakeholder while also responsible for appointing its chairman, to intervene in the matter in the interests of the investors.

"This is especially given how it beats upon its own chest about social justice and its Demochristian values," Bonello stressed, adding that all stakeholders willing to stand idly by in the face of injustice deserve blame.

Finco had previously filed a number of claims for compensation against Bank of Valletta on behalf of clients on the grounds of mis-selling and breach of MFSA investment regulations when BOV sold, amongst others, Lehman, RBS, HBOS, Lloyds and Barclays perpetual securities.

On 5 January 2012, the MFSA announced it had imposed an administrative penalty of €175,174 on BOV for failing to ensure that the investment advice provided was appropriate and suitable for customers.

Bank of Valletta has however not yet restored these investors to the same financial position they were before they invested in the perpetual securities, as recommended by the MFSA but not yet complied by BOV.