Finco: BOV withholding MFSA investigation from its own subsidiary

An investor in Bank of Valletta's La Valette multi-manager property fund has filed a court case against the bank and its investment arm Valletta Fund Management, as well as the La Valette Sicav and its directors, for the loss of €263,000 in savings which he invested in the fund.

Anthony Abdilla said the current realisable value of his initial investment is understood to be less than €70,000, after the fund lost almost €50 million in its investments in underlying property funds.

Finco Treasury Management, who led the judicial protests against BOV and sought compensation for the investors who lost their savings, said in a statement that La Valette Sicav gave notice to its shareholders of the forthcoming annual general meeting on 17 February, 2012, only now on 1 February.

Finco partner Paul Bonello said that the directors' report of 16 January states that the Sicav's directors asked the bank - which is the owner of VFM and the custodian of the Sicav funds - to produce a copy of the correspondence on the MFSA investigations on BOV and VFM, which led to the sanctions over in connection with the breach of the Fund's Investment Restrictions.

But the directors' request for such documentation was formally declined by Bank of Valletta and Valletta Fund Management.

BOV and Valletta Fund Management were fined €350,000 in an initial investigation by the MFSA, for having breached the fund's investment restrictions.

Bonello said that at the AGM, the only independent director will be Prof Salvinu Busuttil, who is proposing himself for re-election.  The other directors - also proposing themselves for re-election - are Valletta Fund Management  Ltd, and retired BOV chief executive Tonio Depasquale. Joseph M. Demajo, a previous director, passed away recently, while John C. Ripard resigned after having been found by the MFSA to have redeemed his investment when privy to information in his position as director of the Sicav.