The lawyers representing the National Bank shareholders are hoping to meet the Attorney General as soon as possible in an effort to break the looming impasse over the valuation which would end the 40-year-old case.

There are 350 shareholders from the former National Bank of Malta, which was taken over by the government following a run on the bank in 1973. Court cases were instituted by shareholders and their heirs in 1992 against the Prime Minister, the Finance Minister and the Administration Council which briefly ran the bank in 1973.

In October 2014, the Constitutional Court of Appeal presided by Mr Justice Tonio Mallia, Mr Justice Noel Cuschieri and Mr Justice Joseph Azzopardi confirmed two judgments handed down earlier that year by Mr Justice Joseph Micallef. It confirmed that 82 shareholders’ rights were breached when they were forced to surrender their stakes without compensation.

Mr Justice Micallef has since then been hearing submissions from the two sides in an attempt to come up with the amount of the compensation that has to be paid.

However, in spite of the judgment by the Constitutional Court of Appeal, the government is still disputing that the bank has any value at all.

Consultants Ugolino, Nun and Chilton drew up the government’s version of the valuation in June 2015, setting it at zero, while former banker Anthony Curmi, on behalf of the shareholders, argued that they were owed almost €325 million.

The government’s argument remains that the bank was “illiquid and insolvent” and that it therefore does not owe a cent in compensation to the shareholders.

Lawyers representing the NBM shareholders said during the last hearing on June 30 that there were three crucial points to be decided before the two sides nominate their experts. The first is whether the bank was a going concern or not – as this would determine the methodology to be applied. The second would be to agree on whether the valuation should be based on the fateful day in December 1973 – or to take into consideration the developments over several months. The third would be how to handle bad and doubtful debts, and whether to investigate the cases for which files were reported as “missing”.

Sources familiar with the case said that the court was in a difficult position as it would obviously prefer for the two sides to agree on a panel of experts drawn from nominees submitted by both. However, without agreement on these basic principles, it would be almost impossible to proceed.

The court was adjourned to October 4 in the hope that the two sides would be able to reach agreement during the summer recess. The sources said that if the two sides could not agree on the way forward, Mr Justice Micallef would have to appoint a panel of experts himself and to determine their terms of reference.

(The Business Observer, distributed with Times of Malta every Thursday)

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