The National Bank crest can still be seen above the Bank of Valletta sign on Republic Street, Valletta. Photo: Chris Sant Fournier

Former shareholders of the National Bank yesterday won the latest round in their 40-year legal fight when the court decided that their fundamental human rights had been breached.

In a preliminary judgment yesterday, on a case instituted by 33 former shareholders who had their shares taken over by the Labour government in 1973, Mr Justice Joseph Micallef decided that they had every right to compensation because their private property was taken against their wishes.

“Although it is true that, at the time when the government asked the shareholders to give up their shares, these had almost no value because the bank was going through a bad patch due to lack of liquidity, it is also true that the bank had substantial assets which had a higher value than any debts it could have had,” the court said.

Wealth was taken from the shareholders and they were not compensated for it

“Such wealth was taken from the shareholders and they were not compensated for it,” the judge ruled.

The court decided that this amounted to a breach of the shareholders’ fundamental rights under the Constitution, adding that it would now move on to hear the case to determine the level of compensation to be given to shareholders.

This was the second decision on this issue in less than a month.

In January, in a similar case instituted by another 49 shareholders, who had given in to the government’s demands and signed to release their shares, the court decided that they also should be compensated as they had been forced to surrender their stakes and were not given any compensation.

The National Bank saga goes back to 1973 when, after a run on the National Bank and Tagliaferro Bank, the government intervened to take over the assets of the two financial institutions, saying this was in the national interest.

However, the shareholders claim that the move was part of an orchestrated plan by the Mintoff government to take possession of important sectors of the economy.

Negotiations between the government and shareholders over the possibility of an out-of-court settlement have been going on for years and the two sides were said to be close to a final deal at the end of the last legislature.

The talks failed because the shareholders were not satisfied with the level of compensation they were offered.

Sources close to the shareholders had told Times of Malta they were seeking some €50 million in compensation.

So far, the government has not yet declared whether it will appeal the decisions.

Times of Malta is informed that the shareholders are still open to an out-of-court settlement, despite the favourable court judgments.

Lawyers Max Ganado, Ian Refalo and Evelyn Caruana Demajo are representing the shareholders.