A Bank of Valletta fund director, John Ripard, has resigned after the financial services regulator found that he sold holdings in a property fund that went bust just before trading was suspended.
In a statement dated January 5 but only posted on its website yesterday, the Malta Financial Services Authority said Mr Ripard disposed of his holdings in the La Valette Multi Manager Propety Fund “while in possession of sensitive information which was not available to the public and which he became privy to in his capacity as a director of the La Valette Funds SICAV”.
He was “reprimanded” by the regulator for disposing of his holdings in the property fund in 2008 before the bank suspended trading, leaving thousands of investors high and dry.
The regulator’s statement said that Mr Ripard “voluntarily tendered his resignation” from the post of director on the boards of the La Valette Funds SICAV and the Wignacourt Funds SICAV.
Mr Ripard denies the disposal resulted from his having any sensitive information, the bank said last night.
In 1992, Mr Ripard, an avid yachtsman, was awarded the Midalja għall-Qadi tar-Repubblika, the country’s highest honour.
The property fund is a sub-fund of the La Valette SICAV and the MFSA was investigating allegations that some shareholders had disposed of their holdings as a result of insider information.
Some €16 million worth of shares were redeemed in 2008 at a price that was 400 per cent higher than the adjusted price when the fund was suspended in the summer.
Mr Ripard’s case is linked to the investigation but, despite having concluded its findings, the Authority has not yet published the results.
Paul Bonello, the managing director of Finco Trust Group, a financial services company, yesterday called for the report to be published.
Mr Bonello has been leading the charges against BOV over its management of the fund and was highly critical of the “take it or leave it” settlement agreement the bank offered investors last year.
He estimated that some €12 million from the €16 million withdrawn from the property fund before it was suspended were redeemed as a result of incorrect pricing.
“Effectively the property fund shares were worth 28c when the fund was suspended while those who redeemed their shares before got between €1.07 and €1.17,” Mr Bonello said.
The extra €12 million withdrawn from the fund, he added, eventually had to be borne by the rest of the shareholders who remained in the fund.
“Whether those who redeemed their shares did so with criminal intent or were simply doing so innocently is up to the police to establish,” Mr Bonello said.
The bank has in the past insisted that the allegations of insider trading would be proven wrong by the MFSA investigations. It was asked by The Times yesterday whether the chairman, Roderick Chalmers, now feels he has to resign as a result of the Ripard case.
BOV said it had always maintained that Mr Ripard’s disposal of his holding was not the result of any sensitive information that may have been in his possession in his capacity as an independent director of the La Valette SICAV.
“The chairman has always stated that he does not believe that any of the Bank of Valletta management, staff or their families had traded in La Valette Property Fund units on the basis of having had access to privileged information. That remains the chairman’s firm view,” the bank said.
“John Ripard is not, and has never been, a member of the Bank of Valletta board, management or staff.”
Last year the MFSA found BOV in breach of financial regulations in connection with the property fund in the first of three investigations.
The bank and subsidiary company Valletta Fund Management Ltd were fined a total of €347,816 for regulatory breaches.
However, there are two investigations which have not yet seen the light of day despite repeated statements by the Authority to the effect that they should be published soon.
One of the pending investigations concerns the issue of insider information and the other of incorrect selling of the fund to inexperienced investors.
Recently, the bank was again fined some €175,000 in respect of regulatory breaches related to other financial products it was selling.
However, this was unrelated to the property fund.
ksansone@timesofmalta.com