Bank of Valletta’s annual general meeting, reported in Friday’s issue of The Times, deserves some reflection and comment since the non-attendance of many shareholders, who justifiably consider it a waste of time, is somewhat unfortunate.
An issue reported in the financial statements that stands out like a sore thumb is the spiralling of the impaired loans and advances to customers, by a whopping €60 million when compared to 2009. A spontaneous question that arises is why this dent in the credit quality of the group’s lending portfolio?
Another interesting and questionable feature on the agenda is a list of extraordinary resolutions which proposed amendments and inclusions to the Memorandum & Articles of Association of the bank. Again, two of the proposals (listed below) deserve special mention because of their controversial nature and eventual implications, which the Malta Financial Services Authority (watchdog) should be aware of:
“New inclusion: Art. 45A.1. No answer is required to be given by the company where: (iii) It is not in the interests of good order of the meeting that the question be answered.”
Now, I ask, who will decide and be the judge of this undemocratic and despotic measure which may also be considered to be ultra vires!
Current text of Art. 72.2 reads: “72.2. A director shall not vote at a meeting of directors in respect of any transaction, contract or arrangement in which he has a personal material interest, whether direct or indirect.”
Amended text so that Art 72.2 reads: “72.2. A director shall not vote at a meeting of directors in respect of any transaction, contract or arrangement in which he has a material interest, whether direct or indirect.”
Why eliminate the word “personal” and give rise to speculation? One would have expected a tightening of this measure by inserting “and/or” after the word “personal” in the original text!
We now have a situation where Bank of Valletta directors who have a personal interest, direct or indirect, can actually vote at a meeting of directors in respect of any transaction, contract or arrangement. Quite astonishing!
How is that for good corporate governance which Bank of Valletta declares it champions?
Any further comment is superfluous!