Hundreds of indignant investors in Bank of Valletta’s collapsed property fund are threatening to take legal action against the Malta Financial Services Authority and the directors of La Valette Funds Sicav.
In a fresh judicial protest, notified to the Attorney General, 452 investors claimed the MFSA was not complying fully with its role as prescribed by law.
“Our legal advisers caution you that, in the absence of compliance with the law, we intend to commence legal action against you and to hold your authority responsible for ensuing damages,” Finco Treasury Management, representing the investors, told the MFSA directors in a letter.
On Wednesday, the MFSA slapped a “landmark” fine of €347,816 on BOV and Valletta Fund Management Ltd for regulatory breaches in relation to its La Valette Multi Manager Property Fund.
But the investors want to see the MFSA’s full report of its investigation, which is available to the bank but not to them. They also want the MFSA to take a stand regarding the offer made by BOV on May 26 to buy back the shares at 75c each.
“The publication of (the MFSA’s) decisions without releasing the report, besides being a denial of an inalienable vested right of the investors by none other than the regulator and their presumed protector puts investors at a disadvantage vis-à-vis its counterparties that have access to the preliminary/final report/s,” Finco said.
“All this compounded by the fact that acceptance of the offer requires that investors give up all their legal rights to sue for damages, irrespective of what your outstanding investigations will reveal in your own good time.”
Two more investigations are pending.
Meanwhile, the investors also sent a letter to the directors of La Valette Funds Sicav plc, calling on them to take immediate action against Valletta Fund Management and BOV as manager and custodian of the fund. Sicav should ensure the compensation of clients and shareholders in the fund for all the losses suffered, they insisted.
“In default, our clients are reserving all their rights at law, including the right to take further action against you personally as directors of the fund without further notice.”
The Labour Party spokesman for economic policy, Charles Mangion, said that once MFSA has expressed itself clearly over the La Valette Multi Manager Property fund there was space for mediation between the bank and the investors.
He called for the bank’s offer and the imminent deadline to be withdrawn so that discussions could be held with the best interests of both the bank and investors in mind.