Finance Minister Tonio Fenech refused to comment on the Bank of Valletta’s failed property fund issue, saying the government did not get involved in matters involving a regulator and a bank.
He did, however, express satisfaction at the way the issue was being dealt with by the Malta Financial Services Authority.
The government has a 30 per cent share in Bank of Valletta, whose La Valette Multi Manager Property Fund went bust, leaving investors high and dry in August 2008.
Mr Fenech would not say whether the government was in touch with the bank over its handling of the fund.
“I am responsible for the regulator and I cannot comment on issues between the regulator and an operator. I think the process between the regulator and the bank is going ahead well,” he said.
The MFSA has just reprimanded a former director of the La Valette Fund, John Ripard, for disposing of more than 72,000 shares while in possession of sensitive information that was not available to the public.
A day after news of the reprimand emerged, through a statement on the MFSA’s website, the bank announced the conclusions of an investigation conducted by the regulator, which, they said, had absolved bank staff members of insider trading allegations.
The bank said the regulator had cleared staff members and “persons connected to them” of using confidential information to redeem their holdings in the property fund before it was suspended.
The investigation findings have so far not been published by the MFSA.
Mr Ripard, who is not a BOV board or management member, voluntarily tendered his resignation although the bank said he maintained his innocence.
Asked whether the findings of the MFSA investigations should be made public, Mr Fenech said there was a law that regulated such matters and “what is important is that we stick to the law”.
“It’s not a matter of who the operator is but what the law states,” he said.
A leading investment consultant, Finco Trust Group, which has been representing aggrieved investors against BOV, questioned the findings of this report.
Managing director Paul Bonello insisted that the MFSA should explain why it used April 1, 2008 as the watershed date for investigating redemptions by bank staff when it was clear that in January that year the doomed property fund was already in hot water.
In June, the MFSA had fined the bank and Valletta Fund Management Ltd a total of €347,816 for regulatory breaches in relation to the property fund.
The bank was also slapped with another fine of €175,174 over breaches in the way it sold complex financial products, known as perpetual, which are completely unrelated to the property fund.