Financial watchdog chooses total silence over BOV judicial protest

The MFSA issued a press release at 12:30pm saying it would not disclose information on “its workings with consumers and licence holders” in a reaction to detailed questions by MaltaToday on the depletion of a property fund held by Bank of Valletta and Valletta Fund Management.

Bank of Valletta are facing renewed claims of having overlooked serious shortcomings in a property fund once valued in excess of €84 million, and which today has been depleted by major losses to the €30 million – of which only half are liquid.

A second judicial protest has been filed by some 170 investors, after another firm, Finco Treasury Management, first filed a protest on 4th July in respect of 72 investors registered in its name. Now the new claims have intensified pressure on Bank of Valletta to answer to accusations that it invested money without the necessary due diligence.

But questions on what sort of investigations were being carried out by the MFSA on Bank of Valletta’s Multi-Manager Property Fund, when complaints started flooding it to the authority, were met by this statement from the regulator:

“The issues raised by these judicial protests are being examined by the MFSA, both from the consumers' perspective as well as from the supervisory aspect. The MFSA is bound by confidentiality and will not disclose information on its workings with consumers and licence holders. In specific cases both complainants and service providers will be advised of the Authority's findings and decisions at the appropriate time.”

The statement was sent to all the press.

MFSA was queried on what investigations it was holding into how a €17 million investment in the Belgravia European Property Fund had lost in excess of 90% and is today estimated at €1.3m, while other investments originally valued at some €47 million have fallen to €18.5 million.

BOV is being accused of not being transparent with shareholders when it failed to disclose that the Belgravia fund’s directors were being criminally investigated for fraud by the Jersey police, and that its shares had been suspended by the Jersey Financial Services Commission.

Bank of Valletta, the custodian of the fund, issued clean custodian certificates for three years in succession. The judicial protest states that two of the Belgravia funds have to date not published any audited accounts, which means BOV could not have had in their possession “clean audited accounts” of the funds in which they invested, “which is further evidence of the lack of due diligence on the part of the SICAV and VFM as well as Insight as sub-advisor of VFM.”

Now investors in the fund will only be able to recover an estimated price of €0.26c for every share, when only two years ago the price was around €1.13 per share.