As a significant shareholder with the right to appoint the chairman, the government must shoulder responsibility for Bank of Valletta’s “insensitive attitude” towards small investors, the Labour Party said yesterday.
Labour financial services spokesman Charles Mangion said it was disappointing that the bank had ignored the financial services regulator’s appeal to extend the deadline for the settlement offer to investors in a property fund that went bust.
However, the government rejected the Labour Party’s call, insisting the issue was being investigated by the Malta Financial Services Authority which was an independent entity.
Investors who lost millions in the La Valette Multi-Manager Property Fund have been given until June 30 by the bank to accept a one-time settlement offer of 75c per share.
“The bank is acting in a dishonourable way when as a large institution it is challenging small investors to take it to court,” Dr Mangion said, calling for mediation to start without the pressure of deadlines.
He said the bank had an important financial and economic role to play in the country and it was important that BOV’s integrity should not be eroded.
“The government should not abdicate its responsibility given that it is a shareholder in the bank with the right to appoint the chairman... the financial services sector is still in its infancy and it is important that trust is not lost in the sector,” Dr Mangion said.
He added that the investing public had to feel that its interests were protected and called on the MFSA to publish the whole report of its investigation rather than just the conclusions.
The Finance Ministry shot down Dr Mangion’s suggestion of government intervention, insisting this showed that the Opposition did not want to respect the regulator’s independence.
“It is not the government’s duty to interfere and if it did the government could expose itself to legal action by the other shareholders if its actions were deemed to be detrimental to the bank’s financial standing,” the ministry said.
The MFSA last week fined the bank €347,816 for regulatory breaches in relation to the property fund. The bank has rejected the conclusions and intends to appeal.
However, the MFSA still has another two pending investigations related to the property fund.