Sant's statements on HSBC very dangerous - Dalli

Finance Minister John Dalli has warned Labour Party leader Alfred Sant that his statements on the future of HSBC under a new Labour government seriously risked harming the bank's shares being traded on the stock exchange.

If Dr Sant were to dare touch HSBC it would be a fatal blow to Malta's credibility, Mr Dalli added.

Dr Sant has promised that a new Labour government would hold talks with HSBC in order to revise its role in the economy. The Labour leader argues that a revision in the banking sector is needed especially because foreigners own the majority of HSBC's shares.

In its electoral programme, the MLP says it would investigate the bank's dominant position and remedy the situation while respecting the law and market forces.

Addressing a press conference yesterday, Mr Dalli described Dr Sant's statements on HSBC as "extremely dangerous" and potentially damaging to the bank's shareholders and employees.

The statements, he said, only reaffirmed that voting for Labour meant voting for uncertainty. "I cannot believe how Dr Sant can threaten the position of a private bank of the calibre of HSBC simply because of his own obsessions."

Dr Sant's statements were creating uncertainty among shareholders and employees. "When he says he will not sign the EU accession treaty on April 16, that he will start negotiations with the EU which could take years - and now his statements on HSBC - it is a recipe for a legislature characterised by uncertainty."

Mr Dalli admitted he did not have a clue as to what Dr Sant had up his sleeve for HSBC.

HSBC was the largest bank in the world, setting high standards in Malta and strengthening the credibility of its financial sector.

Mr Dalli also referred to Dr Sant's performance as prime minister, saying it showed serious incompetence in dealing with the financial sector. Dr Sant had managed to increase the deficit to Lm150 million in 1998 and the rhythm of public debt has jumped by Lm125 million annually.

Referring to a press conference on financial services given by Dr Sant, Labour spokesman on the economy Leo Brincat and Labour MP Josè Herrera, Mr Dalli said their assertions did not make any sense in this day and age.

He lashed out at Dr Sant's promise that the new Labour government would abolish the 15 per cent capital gains tax on collective investment schemes. This, he said, was a clear sign that Dr Sant was prepared to promise anything for votes and that he was trying to buy votes.

In reality, the government had already revised the definition of capital gains tax on collective investment schemes. "We have made sure that we distinguish fairly between capital gains and recurrent gain. Perhaps Dr Sant is not aware of the exercise that we have carried out."