Two Opposition MPs, finance spokesman Tonio Fenech and economist Kristy Debono, have warned the government to keep its hands off Bank of Valletta.
Mr Fenech said they were concerned about what was happening at the bank, whose majority shareholding was owned by private shareholders, not by the government.
The responsibility to have good governance, therefore, was even more important.
This was not another department or just another entity that fell under the government’s remit.
The government had the right to appoint the chairman, but once appointed, he was not there to represent the interests of those who had appointed him but of all shareholders.
BOV was one of the most important financial institutions in Malta, contributing to nearly half of Malta’s “financial economy”, so it was vital that it remained autonomous and loyal to its shareholders, who amounted to around 74.8 per cent.
The bank, he repeated, was not owned by the government, which only had 25.2 per cent ownership.
Don’t change this bank into a political party club
The government was looking at BOV as it did any other entity, but when the shareholding of an entity was privately owned the type of management had to be different and the responsibility of governance was wider and much more important.
Referring to the change in chairmanship, Mr Fenech said the government had a right to do this.
Yet this chairman had to keep in mind that he represented the shareholders: if he acted like an executive chairman there would be no one to protect the shareholders and the checks and balances that should exist in financial institutions would be lost.
Furthermore, financial services authority rules did not permit banks to operate with an executive chairman.
This chairman, who had changed the chief human resources officer, quickly created a grievances board to deal with injustices that had previously been suffered, as if the bank did not already have its own procedures in place, he said.
The chairman seemed to also be involved in giving out loans for all the initiatives taken by the government when funding was necessary – such as setting up a foundation headed by the Prime Minister’s wife and the Valentine’s Day Gozo-to-Malta special offer.
Mr Fenech appealed to the chairman not to change this bank into a political party club. He said that people who had one type of political belief were feeling marginalised and this was equivalent to bad governance.
Moreover, it was also important for the purposes of good governance that the chairman did not take decisions on his own but took cognisance of the board.
He appealed to the MFSA to make the necessary inquiries and look into the BOV’s governance.
On her part, Dr Debono said that during the global financial crisis local banks had earned plaudits after stress tests were carried out.
The banks also had strong liquidity and had to be cautious.
She said there was no room for political manoevering in the Central Bank and commercial banks.
Filling vacancies in top positions at the bank had to be above partisan politics so as not to tarnish Malta’s strong banking reputation and credibility.
Dr Debono said there was no room for politics at the Bank of Valletta: setting up a grievances unit and other developments within it were unacceptable.