Finco says BOV chairman refusing arbitration on La Valette compensation
Paul Bonello claims John Cassar White refusing to take additional compensation for La Valette property fund investors to arbitration
Finco partner Paul Bonello has claimed that Bank of Valletta chairman John Cassar White has reneged on a commitment to take the issue of full compensation for La Valette property fund investors to arbitration.
Bonello, who has represented clients in the €50 million property fund bust that has already seen Bank of Valletta pay out €40 million in compensation, has stated that Cassar White is insisting that BOV is not prepared to pay out more compensation over a conditional 75-cent per share offer that investors had accepted.
“It is regretted that the chairman of the award-winning Consumer Bank of the Year, the Bank that Cares and of the retail fund management company in Malta ‘positioned at the forefront of Malta’s fund management industry’ should change his stance as he did,” Bonello said.
The stockbroker said that Cassar White, who was appointed to the chairmanship by government as BOV’s main institutional shareholders in 2013, had previously criticised the bank back in 2012 for being “insensitive to customers’ rights that they must feel that they have the guaranteed support of regulators and political quarters” – citing email conversations with him.
Bonello also quoted Cassar White as having said that the “winds of change will clear up the mess at BOV soon” and auguring that the property fund saga “is closed as soon as possible because it is creating a lot of damage to investors’ trust in the financial system.”
“Alas, that was in summer 2012 when he was waiting in the wings to jump on the chairman’s post. How attitudes change for some people in such a short time,” Bonello commented in his press statement.
Bonello has represented clients who had not accepted the BOV conditional offer of €0.75 per share in 2011, as well as the big number of complainants of misselling in the sale of perpetual securities such as Lehmans’, by Bank of Valletta.
He said these have all been settled in out-of-court settlement agreements with BOV in a most satisfactory manner.
But a full compensation for some 2,500 investors who were offered the 75c compensation continues to be elusive. Bonello says that former MFSA director-general Andre Camilleri had called on BOV to compensate investors in full, but that the regulator accepted the conditional offer, leaving investors out-of-pocket between €0.25 and €0.45 per share.
Bonello said that even a small number of investors who in January 2013 were determined by the MFSA to be ineligible investors in the fund, and were awarded an additional €0.25 per share, are still owed up to an additional €0.22 per share, considering that they had acquired their shares at prices well over €1.00, besides incurring up to 5% sales commission.
Bank of Valletta is adamant that investors who accepted the 75c conditional offer had agreed to a settlement that is final.
Bonello claims the offer was made at a time when retail investor were not provided with the necessary information to make a decision on an informed basis.
“An MFSA report on the findings of its investigations was issued to investors by the MFSA only after investors had judicially called upon the MFSA to inform them of its findings, and this 25 days after the BOV conditional offer was issued and shortly before it lapsed. By this time many investors, being unaware of the MFSA’s findings, had already tendered their acceptance of the bank’s offer,” Bonello said.
“Finco on its part remains resolute in its stance and will not consider this matter as closed until justice is done and the legitimate expectations of the retail investing consumer public are satisfied.”