Nationalist MEP Simon Busuttil has told the Prime Minister he could not understand the financial services authority’s reluctance to take Bank of Valletta to court.
We found him to be a genuine person who stood up to be counted
In a strongly worded letter, copied to the Finance Minister, Dr Busuttil said investors who lost their life savings after being misled by the bank were “feeling alone”.
“I believe we have a duty to protect small investors,” the MEP wrote in the letter, parts of which were revealed yesterday by Paul Bonello, a director at Finco Treasury Management, who has been leading the charges against BOV.
Mr Bonello, who had his credit facilities withdrawn by BOV earlier this year, also said that Dr Busuttil had not attended the opening of the bank’s Brussels branch last June in protest at its actions.
The Government has always remained aloof from the controversy, insisting the Malta Financial Services Authority was an independent regulatory authority and BOV a commercial entity.
“We talked to everyone and in the Nationalist Party we found Simon Busuttil to be a genuine person who stood up to be counted,” Mr Bonello told a press conference.
Mr Bonello did not publish the letter but quoted exten-sively from it.
He praised the Labour Party for making a public commitment to resolve the outstanding issues investors had with BOV if elected to government. The PL had issued a press statement just before Mr Bonello addressed the media.
“I appreciate Labour’s commitment but I also appeal to the Government to fulfil its duty towards vulnerable people, which is the mission of a democratic Christian party,” he said.
In a counter statement, the Government insisted it respected the bank’s autonomy and accused the PL of endangering workers’ jobs with its promises.
Over the past year, BOV was fined thousands of euros by the MFSA after it breached regulations.
The bank was found guilty of selling high risk bonds, known as perpetuals, to inexperienced investors on the premise they were regular, low risk bonds.
Mr Bonello likened perpetuals to the edge of the cliff with people being pushed over when the financial crisis struck in 2008. Millions of euros were lost and the MFSA recommended compensation but the bank has refused to settle the matter.
In a separate case, the bank dallied on reaching an agreement with investors in a property fund that went bust after fund managers invested in high risk sub funds in breach of the prospectus.
In the property fund saga, BOV was also found guilty of selling the product to inexperienced investors and the case for compensation is still ongoing.
Mr Bonello called on the MFSA to take the bank to court and spare the elderly and inexperienced public “the trauma and expense involved in lengthy conventional court litigation”.
He said the MFSA lacked “personality”, even though it was empowered by law to go beyond recommendations.
Mr Bonello said his company’s rapport with BOV improved when Frederick Mifsud Bonnici was appointed chairman earlier this year.
“We talked and gained each other’s trust. Mr Mifsud Bonnici even told me he was sensitive to the suffering endured by the bank’s clients through no fault of their own,” he added.
The bank appointed an internal committee to evaluate the issues at stake and, last week, Mr Bonello said he was informed there would be no change in direction.
“It makes little sense to set up a committee made up of the same people, such as the present CEO, who were involved in this mess in the first place,” Mr Bonello said, adding there could be “the hidden hand” of somebody who no longer worked at the bank.
ksansone@timesofmalta.com