This long-standing saga over the take-over of the National Bank of Malta Limited by the Malta Government for free and without compensation to the shareholders seems to rear its head at occasional intervals. This time the renewed activity resulted following the film ‘Dear Dom’. It was December 11, 1973, when the Prime Minister at the time, Dom Mintoff, decided to step in to stem the run of withdrawals that was hitting the National Bank of Malta.
I doubt if our Minister of Finance remembers anything of this story as he would have been a very young boy then- Neville Curmi
Depositors were queuing at every branch of the bank and whereas during the previous week withdrawals had amounted to just over Lm1.3 million, during that fatal Tuesday December 11, 1973, withdrawals totalled an alarming Lm1.5 million.
Mintoff was reported by l-Orizzont of December 12, 1973 to have said in Parliament: “Jien diġa għidt, dan bħal l’istampede, bħal film tat-talkies. Tara dawk il-baqar kollha, f’dak il-ġenn, ma jimpurthomx jekk hux ser jaqbzu ix-xmara, u mbad ikun hemm xi hadd kuraġġjuz biżżejjed li jmur quddiemhom u jispara bil għan li jwaqqafhom”.
Thus on December 11, 1973 Mr Mintoff fired his guns and stopped the National Bank of Malta in its tracks as in Parliament he announced the takeover of the assets of the bank and the creation of the “Council of Administration” headed by Maurice Abela, chairman, Dennis Degiorgio, ex-manager of Barclays Bank and Antoine Tagliaferro, ex-National Bank of Malta, to take care of the day to day running. Lino Spiteri, then acting head of research at the Central Bank of Malta was, on December 12, 1973 appointed to take charge of the bank’s assets. The December 13, 1973 was a black day for the National Bank of Malta as all branches were kept closed. However the Council of Administration, as empowered by the new law, opened the branches under its control the following day.
So started what is possibly the worst episode in the history of banking in Malta. Today nearly 40 years later, this unfortunate story remains without a proper ending – as if suspended in mid- air with no one courageous or willing enough to call the shots. I cannot understand the rationale. In court we all know that justice delayed is justice denied. I cannot imagine that our justice system can tolerate such delays.
I trust that there are no other cases undergoing the same treatment. Moreover as time goes by, and a very long time has gone by since 1973, many of the direct players are no longer with us. The whole board of the National Bank of Malta Limited has passed away with the exception of Adrian Busietta. Our dear Dom is of course an exception. So is Lino Spiteri. The point I wish to make is that over time the information which could be obtained from the gentlemen directly involved would no longer be possible, but even if still possible, memories sometimes play tricks. Also over time, records may have served their immediate purpose and have been destroyed. I doubt if, for example, our Minister of Finance today, remembers anything of this sad story as he would have been a very young boy then.
I have been in the industry since 1958, long enough I feel to understand that it only takes for someone to call “boo” for money to start rushing elsewhere. Fortunately not much of this has happened, thank God. But I believe we in Malta owe one back to the industry which is at the moment acting as the main shield against the global recession which surrounds our shores. It is the financial side of Malta which is keeping our noses above sea level and we must ensure that it stays there as the future of our youth depends on it.
What is keeping us therefore from deciding one way or another on whether this episode was justified or not?
Many letters have been written to the press, many meetings have been held, many legal issues have been discussed and raised over time but nothing concrete has happened. Why? What is holding up matters? When in 1994, 20 years after the event, still nothing had materialised, I felt it was time for me to document what had happened. It was futile for me to see why the run happened, who was behind it, if anyone? Was the action taken at the time by the government the right one? Certainly not one depositor lost a penny of his investments, not one single employee lost his job. Therefore from this point of view it was a huge success, but what about the owners of the National Bank of Malta Limited? Of course they lost everything. It looks as if they were the sacrificial lamb, was this sacrifice justified?
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The second part of this article, giving more details, will appear in the business section of the Times on Monday.
Curmi & Partners Ltd are members of the Malta Stock Exchange and licensed by the MFSA to conduct investment services business. This article is the objective and independent opinion of the author. It is based on public information and should not be viewed as investment advice in any manner. The value of investments may fall as well as rise and past performance is no guarantee of future performance.
Mr Curmi is a director at Curmi & Partners Ltd.