New judicial protest over VFM property fund

Thirty-two investors in the La Valette Multi Manager Property Fund filed a new judicial protest yesterday against La Valette Funds Sicav, Valletta Fund Management and Bank of Valletta, claiming that they had suffered significant damages as a result of a breach of the investment restrictions in the supplementary prospectus issued by the fund.

The investors reiterated the claims made in the previous actions throughout the summer. The claimants gave details drawn from the underlying documents of nine underlying funds that they claim breach the investment and borrowing restrictions of the property fund’s supplementary prospectus.

The protest quotes the MFSA’s Consumer Complaints Unit Annual Report for 2009 on the promotion of investment products involving such underlying assets as property which said these should be targeted at experienced investors. One of the claimants made to sign an experienced investor declaration is 95 years old, blind and hard of hearing, and not knowledgeable in investments.

Claimants quote a Bank of Valletta advisor recommen-ding a client shift Malta Government Bond holdings into the fund.

The BoV chairman’s comments at a press conference last Friday held to announce the end of year results were also disputed. The chairman had compared redemptions in the La Valette Property Fund to, among others, the HSBC Malta Bond Fund. The claimants said “an even more relevant comparison to make is a comparison with the level of redemptions of the fund with those of the HSCB Property Investment Fund” which had similar objectives to the La Valette Multi Manager Property Fund.