In his article entitled Government Success In Assisting Industry (The Times Business, July 8) regarding ST Microelectronics, Lino Spiteri stated: “Less cheerful is the muted news that the company, apparently, is trying to get the workers’ agreement to trim their remuneration package”.

Quite rightly, due credit is given in the article to government’s efforts in saving no less than 1,400 jobs albeit by the company being constrained to reduce its workforce by another 400. But one has to bear in mind that all this was brought about by economic rather than by political considerations.

I say so because the article took back my thoughts to the situation prevailing way back in 1975 when, at the then government’s insistence, Barclays Bank’s business in Malta was passed on to Mid-Med Bank (the forerunners of the present HSBC Bank Malta). At that time it was a fact that the Barclays employees’ remuneration packages were superior to those in other private employment sectors and certainly drew the envy of civil service employees.

The opportunity for senior government employees to see the salaries of the ex-BBM employees brought down to their own level came about with the setting up of MMB on 01.10.75. This was purely a political decision as MMB inherited the entire business of BBM and continued to reap good profits to the extent that MMB’s shareholders (60 per cent government and 40 per cent Barclays) received dividends of as much as 20 per cent p.a. on their investment! So this was not a cost-saving exercise as is the case of STM.

So the senior civil servants finally got what they wanted with government having scant regard to the fact that, as a result of the reduction in salaries, the majority of the MMB staff were being forced to accept a lower standard of living not due to economic circumstances but purely for political reasons.

Having been personally involved in the negotiations between the government and Barclays I was fully alive to the pressures made on government by the then civil service top brass that the salary of the most senior MMB official (myself as general manager) should be no more than that of the Administrative Secretary in government service.

In my case this entailed a salary reduction of as much as 40 per cent! Others down the line suffered to a lesser extent but the reductions in salary scales severely affected the lives of hundreds of ex-Barclays employees. In no way do I wish to infer that Lino Spiteri personally was responsible for government’s decision. Indeed, he fully recognised the deleterious effect this was bound to have on the living standards of so many bank employees (of both political colours).

In fact, Mr Spiteri gave full support – despite an attempt by senior civil servants to sabotage the idea – to a proposal by Barclays that, to mitigate the reduction in salaries, MMB sets up a non-contributory pension fund. The clear scope was to provide a sort of “deferred pay” as annual contributions to the fund would be forthcoming only from the Bank and not from employees. I emphasise that this was a significant breakthrough as government policy was then against private pension schemes. The toss in favour of MMB (with a government majority shareholding) setting up a pension fund was won purely on the grounds of the reduction in salaries previously enjoyed by ex-BBM staff. This was all well and good at the time but history has shown that the 500 or so MMB employees who voluntarily left the bank’s service between 1975 and 1987 never benefited from the fund as they were excluded, through the acquiescence of the unions representing the employees to a decision of the MMB’s Board (chaired at the time by the late Riccardo Farrugia – a former senior Judge of the Malta Courts), when the pension fund was eventually liquidated in December 1987.

I have already gone to print in other articles I have written on this scandalous decision and so will restrict myself to the main arguments as to why I and so many other ex-MMB employees still feel so aggrieved at the injustice meted out to us. Essentially this is because out of Lm5 million-plus then accumulated on the pension fund the MMB employees still in employment at the time accepted the Bank’s dubious offer to share Lm3.6 million (71 per cent) among themselves allowing MMB to “write back” to its profits Lm1.45 million.

This despite the fact that the legally binding agreements signed by MMB and the Staff Association set up to administer the fund clearly stated inter alia that nothing could be done by MMB “resulting in the return of any monies to the Bank”.

Admittedly, these notarial deeds did not cater for the procedure to be followed on liquidation of the fund as such an event was never foreseen at the time and this was brought about only by government’s decision in later years to introduce a compulsory state contributory pension scheme. However, the fact remains that the MMB Board – with the connivance of the unions representing the staff in December 1987 – clearly contravened a primary condition embodied (with an obvious purpose) in the agreements setting up the pension fund. This and other arguments (which space precludes me from repeating) were put forward to the Malta Courts in two separate cases instituted by a small band of ex-MMB employees on behalf of hundreds of similarly aggrieved colleagues. One case was decided against the plaintiffs, also at the Appeal stage, but the other is still being heard by the Court First Hall. Time will tell if justice will eventually be done.

Coming back to Mr Spiteri, what is very odd is that the evidence given by him in Court (i.e. the “deferred pay” principle) when called upon as witness in the first case was given no weight by the presiding Judges. Neither, for that matter, was mine which tallied exactly with what Mr Spiteri had said in Court although we were the two main protagonists in the discussions between government and Barclays in 1975 regarding the setting up of the MMB Pension Fund.

HSBC Bank Malta, as successors of MMB, assumed the Court cases when acquiring a majority shareholding in the bank in 1990. Not surprisingly, they stood their ground in support of the events of December 1987. A case of big brother having the financial muscle to resort to enrolling costly legal counsel so as to avoid paying for MMB’s deplorable and questionable decision in 1987.

Regrettably, my second letter sent two months ago to Stephen Green, HSBC Group chairman based in London, seeking his intervention in resolving this long-standing grievance remains unanswered. An unexplainable attitude from a man who professes to be a champion of ethics and morality in banking (vide his book Good Value: Reflections on Money; Morality and an Uncertain World).