The financial services regulator is next week expected to publish the conclusions of an investigation into a Bank of Valletta property fund that went bust, sources have told The Times.

Bank of Valletta yesterday met the deadline and made their final submissions in relation to one of the investigations, which relates to allegations that the bank broke investment restrictions outlined in the fund’s prospectus by taking on bigger risks than was permitted.

Sources said the Malta Financial Services Authority will be evaluating the bank’s response and the conclusions will be published some two weeks before the June 30 deadline that fund investors have been given by the bank to accept a settlement offer.

When contacted yesterday the MFSA would not comment on the investigation, maintaining its silence on the nine-month probe.

The MFSA has been investigating three major allegations on the management of the La Valette Multi-Manager Property Fund.

The first concerns an alleged breach of investment restrictions, the second concerns the selling techniques used by the bank and the third concerns allegations that some investors had access to privileged information and withdrew money from the fund before it was suspended in August 2008.

The public only got to know that the regulator had concluded the first investigation two weeks ago when BOV publicly admitted that it disagreed with the MFSA’s interpretation of the investment restrictions.

During a press conference, BOV chairman Roderick Chalmers had announced the bank was ready to settle the dispute with investors by buying back their shares and offering compensation to the tune of 75c per share.

However, investors were given until June 30 to take up the one-time offer.

The offer was described as “a ruse” by the managing director of Finco Trust Paul Bonello, who has been leading the charges against BOV.

At a meeting for property fund shareholders last week Mr Bonello urged them not to take up the bank’s offer and wait for the MFSA to conclude and publish its investigation.

Investors want the regulator to publish the full report of its findings, however, the MFSA had told The Sunday Times that it was only duty-bound by law to publish its conclusions.

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