BOV confirms Tonio Depasquale as CEO, as MFSA investigates property fund

The news comes as MFSA investigators were dispatched to BOV headquarters

as investigations by the regulator continue into complaints received over the way the bank managed a property fund.

BOV is being held responsible by 240 investors for the way its La Vallette Sicav plc’s multi-manager property fund – once valued at some €84 million – was decimated to €24 million; and for not being informed by the bank that the Belgravia Group, which ran three specific funds, had been placed under criminal investigation.

Sources in the MFSA who spoke to MaltaToday said the regulator’s top officials were already alerted to complaints that a director of the Sicav’s property fund could have had access to ‘price-sensitive’ information when he withdrew his shareholding.

Specifically, investors have complained to the MFSA of the abnormal level of redemptions – 14.7 million shares, valued at some €13.4 million or 16% of the fund – that were withdrawn, possibly by investors aware of the worsening state of the property fund after the Belgravia bust: maybe even directors and staff of Bank of Valletta and investment arms VFM and VFS, and perhaps even family relatives.

The MFSA will want to ascertain itself when BOV was made aware of Belgravia’s worsening state, when the Jersey-based financial services group published its 2006 audited accounts, on 30 January 2008.

BOV has been severely criticised for 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.

BOV has already said that after Belgravia published its accounts in January 2008, the bank attempted to withdraw its large investment from one Belgravia fund on 18 March, 2008. But it was advised by Belgravia that the requests could not be entertained, as the funds had been suspended.

The MFSA will perhaps ask the bank why – if it was aware of the worsening state of the Belgravia Group funds – the Sicav was still accepting investments in the fund until August 2008, when it suspended trading; and why BOV – the custodian of the multi-manager property fund – was issuing clean compliance certificates on the Belgravia funds.

Meanwhile, one of the two kingpins believed to be behind the crash of the Belgravia Group is trying to fight a travel ban in Bahrain.

Businessman Russell King is under investigation for fraud in Jersey, where the Belgravia Group is registered and now in liquidation. The travel ban was ordered by Bahrain officials, after Jersey-based firm Close Finance filed a plea. The firm is pursuing the businessman for £2m in outstanding loans.

The order also freezes assets King holds in the kingdom up £2m. The same dispute resulted in a judge freezing the same amount of King’s assets in Jersey back in 2008, when Close Finance believed he was about to sell his house and leave the island.