I commend The Times on its excellent editorial last Saturday under the title Time To Defuse Property Fund Controversy.

The editorial mentions the concept of caveat emptor (let the buyer beware). In this case, however, it ought to be borne in mind that this fund was a professional investor fund meant for experienced investors. The substantive fact is that this highly complex fund was sold almost exclusively to financially illiterate investors (and in quite a number of cases illiterate in the literal sense as well). Many of the investors were vulnerable elderly people who could not understand the risks involved and not even aware that they had signed an “experienced” declaration form.

The question of the breach of investment restrictions contained in the prospectus is the crux of the issue; in our opinion these multiple ab initio breaches increased risk exponentially and caused the larger part of the losses. What is more, investors were also entitled to rely on the independence of fund functionaries to signal any such breaches to the Malta Financial Services Authority, which reporting did not in fact occur. Investors were also entitled to rely on Bank of Valletta’s – as custodian of the fund – annual certifications that the investment restrictions were being respected by the La Valette Property Fund. We already know from Bank of Valletta itself that MFSA has disagreed with BoV’s interpretations. Hopefully, the MFSA findings confirming same will be published this week.

I refer to that part of the editorial where The Times rightly says that it is not appropriate that the representatives of the customers, the bank and the MFSA have so far not met around a table to find a way out of this dispute. While this is true, this is in no way attributable to Finco and to the investors. We have always shown our readiness to do so.

While we have been unwavering in our arguments, we have always been most reasonable and I remind readers that before we started filing judicial protests we did our best to reach an amicable solution without any court publicity.

We therefore reiterate our readiness to find a mutually satisfying out-of-court settlement with the bank, as indeed augured by chairman Roderick Chalmers himself, but such out-of-court settlements cannot be an imposition of one party’s solution on another such as the conditional offer of May 26 on a take it or leave it basis. Yes, as the editor correctly says, investors feel short-changed, because €0.75 per share, albeit three times the real value per share of the fund now, is still far from adequate. Perhaps, more offensive is the timing of this unilateral offer at a time when the three MFSA investigations have not yet been completed, and conditional on a waiver of all legal rights by investors; this far from meets the legitimate expectations of investors.

The above notwithstanding, Finco and its investors remain available to talk around a table without pre-conditions in order to reach a mutually acceptable solution, fully aware that both sides to a dispute would need to make certain compromises on their position.