No assets seized in Deiulemar case, Bank of Valletta says

Bank of Valletta has said that none of its assets have been seized or confiscated in the ongoing dispute with the Deiulemar bondholders in Italy.

BOV is appealing an Italian court’s order for a precautionary warrant requesting €363 million to be hived off, as a provision for damages requested by bondholders of a shipping company that went bankrupt.

The Italian court in Torre d’Annunziata, a province of Naples, upheld the claim back in March after it was brought by liquidators of the Deiulemar group and representatives of the company’s 13,000 Italian bondholders.

While none of the bank’s assets have been seized, BOV however said on Monday that to ensure seamless continued banking operations, the bank placed on its own initiative the whole amount of the ‘sequestro conservattivo’ with another bank, pending the appeal proceeding.

“However, these assets still belong to the bank, held in the bank’s own name and for its own benefit. Therefore, nothing has changed since the bank’s statement of last March,” BOV said.

The bank has appealed the court decision authorising the issuance of the ‘sequestro conservattivo’ and the hearing of that appeal has not yet taken place.

Bank of Valletta took over a trust that held €363 million in assets of shipping company Deiulemar in 2009, which filed for bankruptcy in 2012. Two years later, seven members of the three founding families of the Deiulemar company were jailed for up to 17 years for illegal financial transactions when the company collapsed. It was declared bankrupt in 2012 owing more than €800 million.

They were found guilty of fraudulent bankruptcy, having transferred their assets to Maltese, Swiss, and British Virgin Islands trusts to avoid their exposure to creditors and the 13,000 retail investors who subscribed to their bonds.

“The bank was never in possession of any funds as a trustee when it was established in 2009, and the only trust assets it held consisted of shares in a Madeira registered company, part of the Deiulemar Group, which was declared bankrupt in 2012,” Bank of Valletta said on Monday.

“The bank reiterates that it is determined to take all the action required in any forum to defend itself against the unfounded allegations being levelled against it in the Italian Court of Torre Annunziata, as and when necessary. In the meantime the Bank will keep the market informed of any material developments in this case. The Bank will continue to update regulators on any developments as they arise.”