In their article ‘National Bank – failure facts’ (June 20), Piero Ugolini and Richard Nunn were quick to bring up again their reasons for considering that National Bank of Malta shareholders do not deserve being awarded any compensation by the court.
I totally disagree with these foreign experts if only for four fundamental reasons.
To start with, their arguments are based on international accounting standards and banking regulations that were non-existent in 1973.
Two, evidently they relied on documents the defendants chose to make available to them without having digested the voluminous court transcripts, in Maltese, including my responses during more than five hours of cross-examination in court by the Attorney General.
Three, they discount the fact that they came on the scene many years later while I was very close to the events of December 1973 and remained involved in the local banking scene at senior executive level until 1980.
By that time, Bank of Valletta had recovered the bulk of the provisions for non-performing loans that the NBM’s successors thought fit to increase by 151 per cent immediately on the NBM being taken over, thus creating, through creative accounting, a fictitious negative equity situation of less than the equivalent of €600,000.
Four, they keep bringing up failures of international banks that occurred in recent years and which were sold for a nominal amount because of a negative equity of billions of euros. The reasons for such failures bear no comparison with those that applied in the case of the government’s takeover of NBM 44 years ago.
I admit I had declared that my article of June 15 would be my final contribution in the press on this subject. However, I feel that Ugolini’s and Nunn’s attempt to continue bringing up arguments no longer of import before the court merit a final comment on my part.
What is now awaited is a decision by the court on the amount of compensation to be paid by the government to NBM shareholders. No smokescreen from Ugolini and his co-experts will change this.