I refer to the editorial of January 5 with regard to the ‘quandary’ Bank of Valletta directors find themselves in.

Bank of Valletta plc is classified as a privatised bank (with a State shareholding of just over 25 per cent and the right to appoint a chairman), which is theoretically correct but in reality very debatable.

The government’s appointed chairman/director at the annual directors’ election is privy to millions of proxy votes available from institutional shareholders, who have a direct or indirect vested interest with government, parastatal or BOV entities, which may constitute ‘conflict of interest’.

I must, of course, state this was not the case this time round, as last month all the candidates were appointed as directors without having to stand for election as there were only as many candidates as there were vacancies.

Preferential rights to government-appointed directors to be exempt from clearance by the ‘Joint Supervisory Team’, with regard to the suitability test, somewhat contradicts good practice as well as good governance.

It would of course be very interesting to know what constitutes suitability. I quote the late Lino Spiteri’s advice (Talking Point, October 29, 2007), which would protect the bank against any attempts at interference and an eventual embarrassing caution from Brussels. ‘…The government should divest itself of the right to appoint anyone to the board of directors of BOV, including the chairman’, ‘…the preferential right of the government jars and probably impedes, under EU practice, the choice to leave a quarter of BOV’s shares in the hands of the State’.