Malta Financial Services Authority chairman Joseph Bannister has asked Bank of Valletta to consider extending its June 30 property fund offer deadline so that investors could “reflect calmly on the terms of the offer” and “seek good advice”.
In an interview with The Times Business, which will be published in full on Thursday, Prof. Bannister said:
“Bank of Valletta may wish to re-assess the situation and consider whether it would be beneficial to all parties, in the current evolving circumstances, to extend the duration of its offer.”
He added: “We are confident that such an extension would be considered positively by the market as it guarantees more time for investors to reflect calmly on the terms of the offer, to seek good advice, to make their own calculations and then take informed decisions.
“I would like the bank to consider this measure in the best interest of all parties concerned. Hopefully, it would lower the temperature of certain accusations and insinuations that certain people – very unprofessionally in my opinion – have thought fit to print.”
Last month Bank of Valletta offered to buy back shares and compensate investors in the underperforming La Valette Multi Manager Property Fund. The offer was of €0.75 each share. The whole exercise would cost BoV €45 million which includes €14.5 million in compensation for the fund’s underperformance.
Investors were given until June 30 to take up the limited offer and would give up their right to pursue legal action against the bank. BoV retained the right to withdraw its offer if less than 70 per cent of investors accept it.
Last Wednesday the MFSA fined BoV €347,816 for regulatory breaches in relation to the property fund, which the bank has decided to appeal. But the authority has still to conclude its investigations into two other issues being looked into, namely allegations of mis-selling and people who may have sold their shares in the fund on the basis of information which was not available to the public.
Prof. Banister said it was not possible to give exact conclusion dates for these two investigations but the MFSA was still aiming to conclude them as early as possible.
“Complaints about mis-selling are still being received, and until these are exhausted, it will take time before we will be able to conclude the report on mis-selling,” he said.
“Both investigations are ongoing and they are both time consuming. The MFSA has to request the necessary files from the operators involved and then carry out interviews with both parties, analyse the facts and try to reach reasonable founded conclusions.”
Prof Bannister said the MFSA was not involved in the offer made by BoV to investors.
“The offer was BoV’s initiative and added a new dimension to the current disputes and investigations. But then this is exactly why licensed professional financial advisers exist. They should give investors their expert objective views about the offer,” he said.
Asked whether the MFSA would publish its three full investigative reports on the property fund as demanded by Finco Trust, which has been leading the charges against BoV, Prof. Bannister said:
“On viewing the MFSA’s website, one can see that the MFSA has taken many decisions in the past, some of which even resulted in the revocation of licences. In none of these cases has the MFSA published the report of the investigation which led to its decision. Nor has it ever been requested to do this. It has only been in this case that much fuss has been made on the publication of what is after all usually considered by everyone concerned as a confidential document.”
» See full interview in The Times Business next Thursday