No extension on BOV property fund offer

Bank of Valletta welcomes comments by MFSA chairman to 'lower temperature' in property fund affair.

21 June 2011, 12:00am
by Matthew Vella

3 min read

Bank of Valletta has decided it will not extend its compensatory share offer on the La Valette property fund, after MFSA chairman Joe Bannister said it would allow investors to “reflect calmly” and “seek good advice” on the offer.

Prof. Bannister today was abroad and unable to take questions from MaltaToday over the statements he made to the Times.

He has so far not answered public queries by Finco to pronounce himself on whether BOV’s share offer should be withdrawn given that the regulator has only completed one of three investigations into the property fund; and that he is declaring that the investigation reports will not be published.

Bannister’s comments today echoed advice given by BOV in an explanatory letter that urged invetors to to seek independent and competent advice on their offer.

“In the bank’s view this period of over thirty days since the launch of the offer should have allowed sufficient time for reflection and the seeking of advice.”

BOV also pointed out statements by Bannister in which he expressed his opinion that certain people had acted “accusations and insinuations certain people – very unprofessionally in [his] opinion – thought fit to print.”

The bank said this was something it had been saying for some time, and that it was confident the MFSA will take all the necessary measures to ensure the discontinuance of such unprofessional behaviour.”

But Finco Treasury Management partner Paul Bonello, who represents investors in the property fund saga, slammed Bannister’s comment. “It bothers me that Bannister 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.”

Bank of Valletta said “several hundred investors” have accepted a compensatory offer of 75c per share for the losses incurred in the property fund, believed to have lost some €50 million. The investors have to drop all legal liability against the bank that may result from further MFSA investigations in the fund.

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.

The bank said it firmly believes the MFSA report on the redemptions will exonerate the Bank from any wrongdoing.

But it said that if the MFSA finds any shortcomings on he bank’s sale processes, “any complaints will need to be reviewed on a case by case, investor by investor, basis.”

BOV said it will process all acceptances received by 30 June, and full payment of the amount due to each investor will reach them by not later than Wednesday, 6 July 2011. “Every investor should be free to make his or her own choice… it does not believe that a very vocal but small minority of investors should be permitted to impose their will on those other investors,” BOV said.

Matthew Vella, a freelance journalist at MaltaToday, was formerly executive editor at Malt...

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Mark Fenech •

I do not need to provide anything to you for FINCO has provided these documents on my behalf as their client. Besides MFSA has already come out with decisions on one report and there are 2 other reports yet to be concluded by the Regulator, so do I need to provide anything to you. Remember there is yet one important report to come out - on the insider information of the fund and those concerned managed to sell their shares for a good price. If BOV would be found guilty on this count, we shareholders should receive the same amount plus interest accrued. So pcassarm, you pretend that we accept what BOV is offering to us, when there are still two reports to be concluded, and you want us to compare with HSBC property fund price. I do not know where HSBC invested their clients' money and I do not care for I am not a shareholder in that fund and you should do the same as you have declared that you are not a shareholder of the BOV property fund neither, so what are your interests? Just a disciple of Mr. Chalmers, who would soon give you a promotion for your efforts, but remember that Mr. Chalmers days are numbered and he should have had the decency to resign after the mess BOV was involved under his chairmanship.

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Mr Mifsud, with all due respect not once in all your blogs have you provided or tried to provide firm justifications as to why you do not feel that Bank of Valletta's offer, offers a fair compensation to investors. In essence this Offer of which much has been commented about in the media addresses all the issues you mention in your last blog. Ultimately the low geared property fund benchmark, that was valued at Euro 0.74c and is representative of the European Property Market does not have any Belgravia Funds in it and the index comprises only low geared funds, (as the MFSA is advocating on the gearing issue, albeit clearly BoV disagrees with the regulator's position. > Empty rhetoric, allegations that I and others bloggers providing a view on this matter have an interest, that I am a shareholdes who sold out of this Fund before its suspension, or that in any way I am on the payroll of BoV is simply pure conjecture. > You simply like throwing allegations hoping that ultimately some of it will stick. You will appreciate that this does not lend any credibility and I would have expected clear and unequivocal reasoning why you do not agree with what is being proposed rather than referring to your own personal matters and similar hogwash. > I have invited you on countless times to have a look at the HSBC Property Fund. This neither has any Belgravia issues or any other related matters as of that and is still valued at Euro 0.68c - down 32% from its launch. Maybe you should also feel like throwing a couple allegations in this regard as well and why not, also throw a few other allegations aimed at the various other European Property Funds managed by the likes of Morgan Stanley, JP Morgan, Aviva and other similar names whose property funds are down some 25% to 40% from their launch dates. I rest my case.

Mark Fenech •

The Alchemist and pcassarm l-anqas tafu tistħu. Uru isimkom jekk intom kapaċi u tghidu li inthom newtrali u ma ghandkomx interess. Forsi kontu minn dawk li rnexxilkom tigbru fluskom qabel il-fund gie sospiż. Ħalluna ħalli niġġieldu lill-BOV. Diġa mxejna biċċa sewwa, imma xorta għadna l-bogħod għax id-dixxipli ta' Mr. Chalmers investew flusna mal-ħallelin tal-Belgravia Fund, li l-anqas l-accounts qatt ma kienu raw, imbagħad imur xi ħadd biex jissellef xi €1000 u jitolbuħ garanzija. Jiena stess mort il-Branch ta' Ħaż-Żebbuġ, u mort l-advances u tlabthom overdraft ta' €1000 għal tliet xhur, l-ewwel kelma li qaltli l-uffiċċjal kienet xi "pledge" sejjer tagħtina fuq din is-somma. U mort hemm biex inkun ċert lil lill-Maltin il-flus ma jagħtuhomlomx kif ġieb u laħaq. Imma lil ħallelin tal-Belgravia miljuni kbar tagħhom kontra xejn, ara kemm huma tajbin għan-negozju dawn l-uffiċċjali l-kbar u The Alchemist u pcassarm issa jriduna nibilgħu kull ma jgħidilna l-BOV, għax probabbilment dawn uffiċċjali kbar tal-BOV li ħlief yes sir, yes sir ma jafu jgħidu. His master's voice jgħidulhom, hekk imisskom iffermajtu. Anke l-Premieship Ingliż meta dawn l-istess nies tal-Belgravia riedu jixtru lil Newcastle United ma ħallewhomx, għax kienu jafu li huma brikkuni u ħallelin, u l-Premiership Ingliż fil-football jifmu mhux fil-finanzi, imma xorta ndunaw, imma l-bravi tal-BOV ma kellhomx ħila jindunaw b'dawn il-brikkunati. Dak imissur jgħidilna s-Sur Chalmers li jrid jibqa mkaħħal mas-siġġu flok ikun raġel u jerfa' rrisponsabilita. Mela qatt ma sema x'jagħmlu f'pajjiżżi serji meta jinqalgħu każijiet anke ta' anqas importanza. Ħalluna dixxipli tas-Sur Chalmers.

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Suppervja ghala Ingliza!!!!!!!!!!!! L offerta imissa harget wara li ikunu ippublikati r rapporti kollha tal MFSA. Kont qieghed nitkellem ma zviluppatur tal propjeta, klijent antik tal bov u qalli li xi hames snin ilu, il bank waqqaf is self ghal isvilupp tal propjeta u l manager tal klijent qallu biex imur bank iehor. Din l ordni giet minn ghand Chalmers. Mela kif jispjega l bank li ma sellifx akter ghal isvilupp tal propjeta meta fl istess hin hareg bil property fund u investa fil propjeta barra minn Malta fejn is suq huwa volatili

Anthony Haidon •

With reference to the Times of Malta last report and for your information Mr.Chalmers, the small quantity of vocal investors investors which you refer to are being as vocal as your are except their only crime was to trust their wealth managers. Do you honestly feel that everybody should have remained silent? The MFSA has showed us that we were right at least on some of the issues (so far.) All you are trying to do is net as many people as possible to accept your offer BEFORE they know where they stand. And the offer by the way does not amount to a twenty-five per cent loss, the loss is nearer to fifty due to loss of interest. I have to live to see the day when the Bank fails to collect interest on monies owed to it. The bank has itself made safer investments with PEOPLE than people have made with the BANK. One of the alleged wrongdoings mentioned by MFSA is 'failure to keep proper records' I wonder why. We are talking of a leading financial institution here not some two bit hawker in a third world country.

owen sammut •

It seems that BOV are planting some of thier officials writing under a pen name in a futile attempt of 'damage limitation' This will not worry me in the least. Public opinion everywhere is against BOV and this is what counts. It was obvious from the start that BOV will not extend the offer. They want to come out of this mess incurring the least possible expense. They wish that most of the investors (even those who suffered mis-selling by BOV) will accept the offer. Obviously the valuation of the offer by BOV is only based on the low gearing of some similar funds but does not take into account the hundreds of investors that have been mis-sold the products which are entitled to th repayment of full capital and interest. This Pandora's box will soon be opened and will have to be faced by BOV. What about the 'insider trading' allegations? Obviously the offer by BOV is a pittance to what they should be paying but the day of reckoning will eventually come for the bank. What about the MFSA, the supposed Regulator? It does not even have the courage and the pride to publish the reports it has compiled. What Regulators do we have in this country? Puppets on a string at the beckoning of the Government and the licencees such as BOV. Mr Bonello is right. The sarcastic comments by a public institution such as the MFSA are uncalled for especially when such an institution is lacking and some of its top officers do not possess the right personality, attributes and drive to discharge properly their responsibilities. They should publish the reports since the legislation states this. Who are these people? Are they a bunch of untouchables acting outside their legal remit? One day these reports will have to be produced in a Court of Law and will serve as further evidence of the of the unprofessional way in which this fund was managed by BOV. Surely the investors are at the right side of the law but notice the panic of BOV and the MFSA. They do not even know where to start.

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These judicial protests by Finco, some eight of them so far, are becoming simply sensationalist tactics. Mr Howard look at it the other way.After all the accusations by Finco on the issues as mentioned, why hav'nt Messrs Finco gone to court particularly on the basis of the MFSA report on gearing? Guess why......the Offer made by the Bank fully covers the gearing issue. Laslty how do you think BoV would be portrayed if it took Finco to court....clearly that Finco is being victimised. As to the timing of the Offer....well its been in the market for nearly four weeks!!! Should the Bank penalise those that have accepted the Offer for the sake of the complaining minority. Five weeks are in my view clearly sufficient for one to decide whether the offer is fair and equitable or otherwise.

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I dont understand how these pepole still think that they can do what they want and walk away with it. About allegations made in the press and also in public no banking institution took anyone to court to stop these allegations or sue for liable. That only means one thing that the bank of Valletta is in deep s..t in this matter and should shoulder responsability. Or else the pepole should stop trusting this institution and take any action they deem fit, if not than investors are happy with all this. If you dont move do not expect any one to do the work for you.

Anthony Haidon •

The caring bank has shown its true colours once again. 'Enough time to consider offer' indeed, consider on what information except a whole list of wrongdoings which came to light even though only one third of the investigation is completed. The caring bank is treating us investors like some criminal in a third world country who is sentenced without the court considering the evidence, and to add insult to injury just for good measure, somebody is backing this state of affairs. This attitude goes against natural law and certainly against common decency. Besides, the outcome of the first investigation proved that the law has been broken and yet ARROGANCE PREVAILS.

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By its remarks Finco thinks it is above every institution in Malta including the highest ie MFSA. That there are those who they say are financially ruined worries me a lot. I have always been taught NEVER to put ALL eggs in one basket. They may opt to take the offer by BOV ONLY after having had a professional advice. Remember Lehman. They were not given any opportunity. My investment (shares) in a big local bank (not BOV) is less than half to what I spend a few years ago. Perhaps a fixed deposit is the safest but then they pay peanuts.