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‘Moral victory’ for National Bank shareholders as court finds human rights breach
Court finds former shareholders of the National Bank of Malta had their human rights breached in 1974 bank takeover.
10 January 2014, 12:00am
Miriam Dalli
Miriam Dalli
2 min read
1972, Dom Mintoff
The court has found former shareholders of the National Bank of Malta to have had their human rights breached when the government took over the bank in 1974.
The main shareholders, many of them members of the Maltese nobility, have been waiting four decades for a compensation case in the courts of Malta to be concluded, with judgement being postponed ever since.
The shareholders launched two court cases, one to argue that there had been a breach of human rights and the second one to seek compensation.
After a court case was filed by shareholders in 1977, Mr Justice Joseph R Micallef yesterday ruled that the shareholders' rights had been breached - a decision which shareholders have hailed as a "moral victory".
Shareholders now hope to reach an out-of-court settlement with the government.
In 2005, informal discussions between investments minister Austin Gatt and NBM shareholders floated the prospect of an Lm8 million (€20 million) compensation package offered to the former shareholders who signed off most of their shares under duress thirty years ago.
Labour leader Joseph Muscat had held a meeting with Jeremy Cassar Torregiani, the grandson of the National Bank of Malta founder, prior to the March elections.
MaltaToday is informed that when representatives of the 350 plaintiffs held informal meetings with Labour, a sum was floated as possible compensation. The offer, described as "a very silly amount" was turned down.
For shareholders, it would be "very unfair" if government were to appeal the court's sentence, even though that remains a possibility. However, shareholders who spoke to MaltaToday said they believed the present administration was "seriously interested" in resolving the issue.
"The previous administration also had the same interest... but it took them 20 years to show that interest," a representative for the shareholders said.
The NBM licence was suspended on 11 December, 1973, announced by Prime Minister Dom Mintoff on television after a week-long run on the bank where Lm2.5 million was withdrawn by depositors. Shareholders insist that the Central Bank refused to act as a lender of last resort, to bolster it reserves. Over the course of the run, the shareholders were forced to sign over their shares to government without compensation, and later in parliament the bank was placed under controllership. It was later nationalised as Bank of Valletta.
Miriam Dalli joined MaltaToday.com.mt in 2010 becoming assistant editor f...
Mark Fenech •
Milli jidher mill-kummenti ta' hawn taht, li qieghdin jaħsbu li l-qorti jirrappreżenta lil Gvern.
Barra minn hekk forsi għiedin jaġgħlu wkoll, għax jista jsir appell. Darba avukat qalli, ma hemmx ħaġa aktar ħażina fil-qorti milli tirbaħ kawża ċivili, għax ġeneralment fl-appell kollox jinqaleb.
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How do you think the 35000 majority votes were assured? By promising everything to any one who had a beef with the previous administration, irregardless of the consequences to the treasury of the island. The fact of the matter is that under currents in both the government and the judiciaries are now comfortable to pass judgment and compensation on a matter that should have been thrown out of court decades ago.
As has already been quoted here…when a bank or any other institution fails the shareholdings are worthless and this administration trying to copy the events of 2008 by the American administration are absolutely nonsense. It’s time for the Prime Minister to reward those that put him in Castille at the detriment of the tax payers. It is shameful and disgraceful that this administration and its Department of Education could not find a measly wage for 58 kindergarten assistants yet will provide tax payers money for assets that were worthless 4 decades ago.
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It all depends on the circumstances of the case. Was the run on the bank engineered by Mintoff and his Government or not? If that is proved then there was fraud. if it is not proven there was no injustice. What Kukkanja has written is correct. You could add Northern Rock, HBOS and Lloyds. The UK Government exacted a huge price for saving these banks and shareholders were wiped out (Northern Rock) or severely diluted (RBS, HBOS, Lloyds). Nobody claimed human rights but on the contrary the Government was praised for saving the country from economic ruin.
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The Royal bank of Scotland passed through a similar debacle and no human rights were breached. When the Lehman Brothers was on the verge of collapsing the Federal Reserve did not want to intervene. If a bank is not capitalized to reflect the assets it holds, it is shooting itself( but especially those of its lenders) in the foot.
It is the duty of the bank not to play cowboys with lenders monies. When bank runs occurs, whether on perception or not, the responsibility lies with the shareholders.The rights of the lenders are more important than those of the shareholders and I stop at that.
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Moral Victory based on justice or moral victory based on a highly political justice system which spanned the 25 years of Nationalist Administrations to peg this infamy to the current Labour Administration.? I strongly believe it is the latter for, having lived the period in question, the people of these Islands would have lost all their holdings had it not been the Government at that time to intervene and save at least the depositors' money. All Governments who have their people at heart have done the same - see the latest bank corruption all over the Western World and see what other Governments have done!! So how can the Courts, NOW, find the Government in 1974 in breach of human rights.? Have not the Courts ruled on this years and years ago with a totally different verdict? One has also to consider the Constitution as it was at that time and not now with the new Laws of the EU imposed on us. This is a sham if I ever smell one to keep the PL Government paying out funds, OUR FUNDS, and keep him short of funds to leave him over the 3% threshold required by the EU; and the Courts are in full political union with the Opposition on this.
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Isn't it a very convenient coincidence that a case that has been going on for 36 years was never decided in 25 years of PN governments but conveniently decided now that there is a Labour government and when Malta has a debt of more the €6 BILLION? Why did the case have to take all this time to be decided?
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This is the sad state of our courts where a judgement has to wait for 40 years to be handed down. This is outright shameful and we should be all be ashamed that we allow this to continue since it seems that both parties do not want to provide justice in our courts. The previous party refused to implement any changes to our judicial system and even kicked out the person who wanted these changes Dr. Franco Debono. He was even classified as insignificant by the previous prime minister to come up with any idea of change. Now this administeration is once again dragging its feet with no light at the end.
