Updated | Opposition parties demand explanation on government acquisition of Lombard Bank shares

Democratic Party (PD) MPs Marlene Farrugia and Godfrey Farrugia have sent a letter to the Prime Minister Joseph Muscat demanding an explanation over the acquisition of shares  in Lombard Bank, using funds generated from the Individual Investor Programme (IIP).

Yesterday it was announced that the National Development and Social Fund had agreed to buy 49% of the shares in Lombard Bank, which are currently held by the Cypriot Popular Bank Public Co. Ltd.

The PD is now demanding a ministerial statement on the move, and an explanation as to why the shares were never put up for sale on the Malta Stock Exchange.

In their letter, the two MPs said that a ministerial statement was the least the Prime Minister could do in the interest of transparency, given that parliament had not been informed of the government's decision beforehand.

The PD members have asked for the statement to be released during the 20 March sitting.

Nationalist Party demands more transparency

The Nationalist Party (PN) has also released a statement demanding transparency from the government in buying Lombard Bank's shares using IIP funds.

The PN said that that its position had remained the same as it was last December, when the government used funds to buy shares in Bank of Valletta. According to the PN, such moves went against the provisions of the the law approved by parliament.

These provisions, said the PN, outlined 12 objectives for which funds from the IIP scheme could be used, including funding social projects to projects leading to an increase in jobs.

According to the PN none of these 12 objectives include the buying shares from banks.

The party referred to what it said were media reports stating that the shares were being purchased as a temporary measure, adding that in the interest of transparency, the government should explain: the reasons behind the move, in light of the fund’s legal obligations; whether the shares were in fact being bought temporarily; and what method would be employed to sell off the shares, and when.

Finally it said that the banking sector was a strong and competitive one, and should not be altered. It added that the government would do well to consult with the sector before taking such decisions.