Bank of Valletta yesterday invited the financial watchdog to look at how it had slowed down its own investigations before pointing its finger elsewhere.

The bank was reacting to a statement by the Malta Financial Services Authority on Thursday in which it was criticised for having contributed to delays in two pending investigations through its “uncooperative” attitude.

“The bank has repeatedly stated that it looks forward to the conclusion of the MFSA’s redemptions and sales practices investigations,” BOV said, ruling out that it had been uncooperative “and does not accept that any delays in the completion of this work can now be attributed to the bank”.

However, BOV went a step further, saying it had invited the MFSA to compare its own response times (which form part of the investigation process) with those of the bank “before seeking to cast aspersions on or to find fault with the bank on this matter”.

The exchange is the first such public skirmish between the bank and the regulator over the pending investigations into the failed La Valette Property Fund, which has cost the bank €45 million buyout offer and a fine of €350,000.

The fine had been imposed by the MFSA on June 15, following the publication of the first report into the bank’s handling of the fund and which found that the managers of the property fund and the bank, as the fund’s custodian, had failed “to act with the level of care and diligence required of licence holders with regard to the conduct of their business”.

There are two investigations pending, one of them into allegations of mis-selling, which the authority said it would release “imminently”, and the other into claims that the complex fund was wrongly sold to inexperienced investors, which should be concluded by the end of the year.

The bank also defended itself from the charge that it had tried to keep secret pending proceedings before a financial services tribunal that are related to this allegation of mis-selling.

The bank argued that the authority had misrepresented its reason for trying to get the proceedings to be held behind closed doors. “There is nothing which the bank wishes to keep ‘secret’ in this matter...,” the bank said, arguing that it was only trying to conform to the banking secrecy rules by which it was bound.

It pointed out that its appeal dealt with matters concerning the use and abuse of powers by the MFSA, which “the bank believed should, in the first instance, be heard behind closed doors”.

“The bank is entirely content to be guided by the decision of the (Financial Services Tribunal) on this matter and was indeed surprised that the MFSA appears to be seeking to pre-empt the authority of the independent appeals tribunal in this regard.”

The case before the tribunal concerns a directive issued by the authority, on June 28, but which was only revealed on Thursday, through which the MFSA ordered the bank to ensure that the rights of inexperienced investors who had wrongly been sold the fund would not be prejudiced by taking up BOV’s settlement offer.

The bank repeated its stand insisting that it had made it clear to all those who took up its offer that they would be automatically relinquishing any claim.

It also contradicted the authority’s statement saying that the MFSA had told the bank after it sought clarification on this directive that “the purported directive should change or modify any contractual relationship entered into between BOV and investors pursuant to the terms and conditions of the offer”.

The Times asked the MFSA for its reaction to this last point and to the BOV’s statement but a spokesman said he had no further comment to make.