Another protest against fund directors

One hundred investors yesterday filed a second judicial protest against Bank of Valletta and the directors of one of its funds, claiming that future and existing investors were still at risk due to the bank’s behaviour.

The protest was filed against the bank and La Valette Multi-Manager Property Fund, a sub-fund of La Valette Sicav plc managed by Valletta Fund Management, a joint venture between BOV and Insight Investment of London.

The same investors had already filed a protest on August 17 alleging mismanagement of their investments by the fund. Another group of investors and an investment company have filed similar protests in recent weeks.

The investors yesterday claimed that, despite the issues they had raised, namely that La Valette Sicav had invested in funds which had liabilities in excess of the funds’ total assets – which was in breach of the rules – the company was still investing.

Their argument centres around the investment of their capital in nine underlying funds they claim were inappropriate vehicles for their investment. In fact, they lost a substantial amount of money due to this mismanagement of the funds, they said.

They further submitted that in the document Investment Restrictions, included in the supplementary prospectus issued on September 2, 2010, the company stated it prohibited investment in funds that had liabilities in excess of their total assets. However, it continued to make such investments.

The bank, they also claimed, was not telling clients the company persisted in investing in the nine still-risky funds.

Lawyer Ian Refalo signed the protest.