Bank of Valletta ‘did nothing wrong’ despite Deiulemar litigation settlement - Gordon Cordina

Xtra on TVM News Plus | BOV chairperson Gordon Cordina says bank did not want to risk losing far more in Deiulemar case despite having a strong legal position

BOV chairperson Gordon Cordina
BOV chairperson Gordon Cordina

Bank of Valletta did nothing wrong in the Deiulemar case, the bank’s chairperson continues to insist despite reaching an out of court settlement for €183 million.

Gordon Cordina said the decision to settle rather than pursue litigation was intended to close the chapter once and for all and allow the bank to focus on the future.

“We had expert advice from external lawyers that the bank had no blame to shoulder but we had no guarantee on how the courts in Italy would decide the case and opted to cut our losses rather than come before our shareholders in two or three years’ time with a bill of €363 million plus interest,” Cordina said when interviewed on TVM News Plus’ Xtra on Monday night.

Deiulemar was an Italian shipping company that went belly up leaving thousands of families from a village near Naples penniless after they had invested in company bonds. Company directors had been accused of fraudulent behaviour in Italy.

Deiulemar had used BOV’s trust services and bitten bondholders sued the bank to recoup their money.

An Italian regional court had found against BOV, which the bank appealed. Pending the outcome of the appeal, BOV had to place €363 million in escrow.

Last week, the bank announced it had reached an out of court settlement with the victims amounting to €183 million despite repeatedly having said it had a strong case.

But Cordina was unfazed, insisting that despite the settlement, the bank was not accepting guilt. “We closed this case once and for all to continue with our life,” he added.

Asked who was to blame within the bank for the Deiulemar case, Cordina insisted the bank had no blame to shoulder but explained that the level of due diligence required of banks became tougher over time.

“The due diligence we have today is incomparable to what it was 20 years ago and the nature of business that led to the Deiulemar case is no longer sought after by banks and not just BOV,” Cordina said.

Meanwhile, the bank is facing a growing chorus of disapproval over its decision not to hold a physical annual general meeting where directors could answer shareholder questions about the Deiulemar case.

Independent candidate Arnold Cassola has led the charge for the AGM to be held physically, insisting the bank owed shareholders an explanation for its behaviour in this case.

READ ALSO: Arnold Cassola - BOV and Deiulemar, who is responsible?

And on Tuesday, Labour MEP and former prime minister Alfred Sant joined the chorus of disapproval for BOV’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”.

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