Sale of Maltacom shares

The Malta Financial Services Authority issued a draft code on takeovers of listed companies a few weeks ago. The deadline for consultation was May 12 and the rules should apply from May 20 onwards. Interestingly enough these dates coincided with the announcement of the Cabinet's approval of the deal to sell a controlling stake in Maltacom at a considerable discount from the share price on the Malta Stock Exchange.

These MFSA rules stipulate that any entity acquiring 40 per cent or more of a listed company would have to bid for the remaining shares at an equitable price. These regulations are found in most developed countries and were part of the acquis communautaire when Malta joined the EU in 2004.

Obviously the Maltacom deal will not be subject to the proposed rules, having missed the deadline by a few days. An interesting point is that the same company was willing to pay a much higher premium for 35 per cent of the shares in Tunisie Telecom than it paid for a controlling stake in our major provider of telecom services. The government has pointed out that other factors were considered besides the price but one cannot help noticing the stark difference between the two nearly concurrent deals.

Our authorities are very good at coming up with laws and regulations but the least they could do is to ensure that the authorities themselves respect and uphold the same rules they enforce so rigidly on us common mortals.

The proposal to extend development boundaries is another case in point. A handful of people will now reap huge windfalls while the public is left to shoulder the burden of astronomic property prices and the consequent high loan repayments.

The country needs to be managed in a much more transparent manner if we are to take our place among our peers in the EU.

Otherwise we risk being taken as nothing more than a joke.