Finco Treasury Management plans another judicial protest on behalf of a “large number of new clients” against an underperforming fund, Bank of Valletta, and its other functionaries in the next few days, managing director Paul Bonello told The Times Business yesterday.
Mr Bonello said that ever since Bank of Valletta launched its €45 million conditional offer to investors in the La Valette Multi-Manager Property Fund on May 28, the Floriana-based firm had been “inundated” with new requests for information and advice. Finco Treasury Management has been spearheading claims by around 400 investors in the fund since last summer. There are around 2,000 individual investors in the fund.
Mr Bonello said the response following a meeting Finco held for investors on June 1 had been “excellent” and not a single client intended to take up the bank’s offer which closes on June 30, even after the bank sent investors another letter this week explaining its terms.
But yesterday, Bank of Valletta told The Times Business investors’ response to its offer “continues to be positive and satisfactory”.
“We are not, however, proposing to give a running total or scoreboard on the matter,” BoV added. “From our extensive communications with our investor base in connection with the offer, the three matters addressed in our further communication emerged clearly as ‘frequently asked questions’. Given the frequency with which clarifications were being sought, it was therefore thought appropriate to send a further letter specifically addressing these three issues.”
Mr Bonello yesterday reiterated his argument that investors were entitled to a full refund with interest, rather than the bank’s offer of €0.75 per qualifying share, as provided by case law across Europe. Investors, he emphasised, were also entitled to know what the MFSA’s investigation into the matter had revealed.
It has been reported that the Malta Financial Services Authority could publish its conclusions a fortnight before the bank’s offer closed.
The MFSA is investigating an alleged breach of investment restrictions, selling techniques adopted by the bank, and claims that some investors effected withdrawals from the fund after obtaining privileged information before it was suspended in August 2008.
Mr Bonello stressed yesterday, that even if the €16 million withdrawals in 2008 were not the result of improper use of price-sensitive information not in the public domain, the effect on the fund and on remaining investors was still a “detrimental” €12 million.
“These withdrawals were made on an incorrect valuation of the price per share, at prices ranging between €1.15 and €1.07 per share, when the proper price ought to have been much closer to €0.25 per share; in fact the price was re-valued at a later stage by Valletta Fund Management. Besides, VFM charged its annual management fee on an inflated and artificial fund value for a number of years.
“The conclusion of the MFSA report on this aspect is most relevant for clients in this fund to be able to consider BoV’s conditional offer on an informed basis.”