Paul Bonello, a financial consultant, has accused the Bank of Valletta chairman of reneging on an agreement to refer a property fund dispute to arbitration.
Mr Bonello, who has championed the cause of aggrieved investors affected by a property fund that went belly up, yesterday took umbrage at what he called BOV chairman John Cassar White’s attitude change.
How attitudes change for some people in such a short time
The head of investment firm Finco recalled how in summer 2012, when Mr Cassar White was not yet chairman, he had criticised the bank’s former top brass for being insensitive to their customers’ rights.
Mr Cassar White had even predicted “the winds of change will clear up the mess at BOV soon”, Mr Bonello added.
“How attitudes change for some people in such a short time,” Mr Bonello said.
The issue involves investors who put their money in the La Valette Multi Manager Property Fund. The fund was a specialised, high-risk instrument and should have only been sold to experienced investors.
The bank was found guilty by the Malta Financial Services Authority of breaching fund conditions, including selling the product to inexperienced investors. BOV was consequently fined thousands of euros.
In 2011, after a long drawn-out battle, BOV had offered investors compensation amounting to 75c per share.
A total of 2,500 investors took the take-it-or-leave-it offer, even if it fell far below their expectations. But the financial services regulator had subsequently instructed BOV to increase the compensation by another 25c.
Finco has insisted the final offer of €1 per share was below what investors had originally invested, claiming the bank owed them a further 22c per share.
Mr Bonello claimed that in recent weeks Mr Cassar White had agreed to refer the outstanding matter to arbitration.
“However, the chairman reneged on this commitment and is now insisting once again the bank is not prepared to submit to a fair and equitable process to resolve the matter on the pretext that investors had accepted 75c per share in full and final settlement,” he said
Asked to react to Mr Bonello’s claims, Mr Cassar White said he had no comment to make “at this stage”.
Before the election, investors had received a letter from then Opposition leader Joseph Muscat promising them a solution to the impasse.
Mr Bonello said Finco would continue pursuing the matter until justice was done.
Meanwhile, the firm announced that the bank had reached an out-of-court settlement with investors who had refused the 2011 offer.
kurt.sansone@timesofmalta.com