MFSA not offering 'parity of arms' on BOV share offer - Finco

The financial regulator will not be publishing the three investigative reports on the La Valette multi-manager property fund as demanded by investors and Finco Treasury Management, the authors of multiple judicial protests against Bank of Valletta.

Malta Financial Services Authority chairman Prof. Joe Bannister told The Times today that the regulator has never published the report of an investigation and said that only in the property fund saga has “much fuss” been made on the publication of what is “usually considered by everyone concerned as a confidential document.”

But Finco managing partner Paul Bonello has accused the regulator of “not offering investors parity of arms” with Bank of Valletta, the custodian of the fund that lost in excess of €50 million.

The bank has offered investors a compensatory 75c per share valid for 30 days – but Bannister has asked that the offer be extended to give more time to investors “to reflect calmly, seek good advice, and take informed decisions” on the offer.

Bank of Valletta is expected to announce today whether it intends extending the offer.

“What hurts me is that articles 19 (a) and (c) of the MFSA Act is clear and unequivocal when it says the regulator must provide complainants a full copy of the report,” Paul Bonello told MaltaToday.

“We formally asked that the MFSA pronounces itself on whether the BOV offer had the prerequisites of a just offer, namely whether investors are fully informed – which they are not since only one of three investigations is complete and the reports are not being published; and because we don’t have the report itself which BOV have had for the past six months, as Bannister himself said, giving the bank ample time to study its offer.”

Bonello also slammed comments by Bannister, quoted by The Times as referring to “accusations and insinuations certain people – very unprofessionally in my opinion – thought fit to print.”

“It bothers me that he is ridiculing the protests by trying to make it seems like a big fuss. I have people crying and families who are financially destroyed – they are not in the mood for laconic and sarcastic comments.”

Bannister told MaltaToday he was abroad when asked to comment on his suggestion that BOV extends the offer.

Labour MP Evarist Bartolo, who has raised the matter of the regulator’s behaviour in parliament, said Bannister had reduced himself to an “Oliver Twist timidly asking BOV for more time for shabbily-treated investors”.

“It’s pathetic… the MFSA is showing itself a very weak regulator and is letting down the very people it is obliged to protect. Apart from betraying its mission to protect consumers, it is giving the green light to financial operators who want to abuse their clients… We need persons of the right moral calibre and professional commitment to be regulators and carry out their duties fairly and fearlessly.”

The MFSA fined BOV €347,816 for regulatory breaches in relation to the property fund, which the bank has decided to appeal. But the authority has still to conclude its two other investigations into allegations of mis-selling and access to price-sensitive information that people might have had before selling their shares.

“Both investigations are ongoing and they are both time consuming. The MFSA has to request the necessary files from the operators involved and then carry out interviews with both parties, analyse the facts and try to reach reasonable founded conclusions,” Bannister told The Times in his interview.