The good news of a fiscal surplus on government’s accounts after 35 years of successive deficits cannot but bring to mind the fact that National Bank of Malta shareholders have still not received any compensation for their shares which were forcibly acquired by the government 44 years ago.
Nearly three years have passed since the Constitution Court of Appeal confirmed a previous judgment in favour of plaintiffs and decreed that value had passed in 1973 from the bank shareholders who were not paid any compensation and this to the advantage initially of the Council of Administration, with the Bank of Valletta benefitting from March 1974.
Yet the court cases by the shareholders for compensation still linger on. Since January 2015, in my capacity of a consultant to the National Bank of Malta shareholders, I was cross-examined by the Attorney General for nearly five hours in three court sittings. This was followed by a presentation in court by three government-appointed foreign financial experts who, in turn, were cross-examined last June by the plaintiffs’ legal team.
A way out of this impasse is for both parties to agree an out-of-court settlement
However, judgment remains in suspense as the Attorney General has been withholding his agreement to names proposed to the court as independent financial experts to advise on the validity of my computations on behalf of the plaintiffs and the arguments put forward by the government-appointed experts.
Even were agreement to be reached between the Attorney General and the plaintiffs’ lawyers on the appointment of an independent financial expert the sifting of all the submissions to the court is bound to take years. Many shareholders have passed away but their heirs still expect justice to be done by way of adequate compensation.
A way out of this impasse is for both parties to agree an out-of-court settlement. Although the government’s accounts are now in surplus there is no need for compensation to be by way of a charge to annual income but by a simple transfer of BOV shares from government to the National Bank shareholders.
Space precludes me from going into too much detail but suffice to say that I reckon that the government’s share of dividends received, net of tax, on its shareholding in BOV from 1974 to date (initially 100 per cent and reduced to 25.23 per cent since 1995) totalled some €190 million taking into account annual inflation over the period as per the official retail priced index.
Following the bonus share issue made by BOV last January, government’s shareholding has risen to nearly 106 million shares. At the current price of €2.24 per share the market value of this holding is about €236 million. Thus the government’s gain at the expense of National Bank shareholders totals no less than €426 million.
Surely now is the time for both the two main political parties to take the bull by the horns and to come up with a firm commitment in their respective election manifesto that a fair offer of compensation for an out-of-court settlement will be made to National Bank shareholders and thus remove once and for all this blot on Malta’s chequered banking history.
Anthony Curmi is a former banker.