BOV

As the initial shock of BOV’s €182 million settlement in the Deiulemar saga fades away, calls for shareholders to be given the opportunity to speak to the directors and management in person have gathered steam, with shareholder rights activist Paul Bonello saying that the bank “is afraid to face its owners”.

Despite the immediate market rally following news of the settlement, the €182 million price tag attached to the bank’s decision to drop its legal arguments, which it had long maintained were correct, caused uproar among some shareholders, with everyone from independent electoral candidate and shareholder Arnold Cassola, former prime minister and current Member of European Parliament (MEP) Alfred Sant, and a newspaper editorial calling on BOV to hold an upcoming AGM in person to respond to questions.

The bank’s initial refusal to do so due to the advanced stage of preparations for an online meeting was met with derision, with Finco Treasury Management Ltd’s managing director Paul Bonello describing it as “an obvious pretext”.

“COVID restrictions are long gone. BOV is afraid to face its owners. That is the stark truth. [BOV Chairperson] Cordina has a lot to answer for, not only because he is currently chairman, but also because he was a director in 2009 [when BOV bought the Deiulemar Trust].”

Paul Bonello by Tyler Calleja Jackson
Finco Treasury Management’s Paul Bonello

He further points out that others involved in the initial decision were given lucrative early retirement packages or even promoted further.

In the face of such public complaints, and following a meeting with the Association of Small Shareholders, BOV is now organising a physical meeting with its board of directors and executive committee where shareholders will be able to field questions on the case. This will be held on Wednesday 15th June at the Hilton Hotel in St Julian’s.

The stockbroker, who has had previous run-ins with BOV, mounting legal cases on behalf of investors in the ill-fated La Valette Multi-Manager Property Fund, says that shareholders must also carry some responsibility for the management’s actions.

“This is a repetition of the La Valette Property Fund in terms of the BOV management’s behaviour, and some shareholders should say mea culpa, because in that case, they benefitted from the arrogance shown with the victims, and sided with management. But if management is not honest with one group, it will likewise not be honest with another. Now they are the victims.”

In an interview with BusinessNow.mt shortly following the announcement, Dr Cordina insisted that he, along with the rest of the board, stood by their decision.

Gordon Cordina - Photo by Tyler Calleja Jackson
BOV Chairperson Gordon Cordina

Asked whether he agrees with this assessment, Mr Bonello concedes that, “having arrived at this stage, it is the right decision”.

“But that does not mean that successive boards do not have responsibility. It jars in a big way with what they’ve been saying over the last years.”

As for BOV, it continues to uphold its claim that its legal position on the merits and facts of the case was robust, but notes that this is no guarantee of a positive outcome in view of the “conditioned environment” of the jurisdiction of Torre Annunziata, where around a third of the inhabitants had lost significant amounts of their life savings in the Deiulemar collapse.

Filing an appeal in Naples, 40km noth of Torre Annunziata, was likewise no guarantee that the public outcry and political pressure would play no role in the court’s ruling, the bank said, noting that in the event of an unfavourable judgement on appeal, its position would be significantly worse than the out-of-court settlement.

Related

Hotels report strong 2024 so far, optimistic about a very busy summer

May 18, 2024
by Robert Fenech

Trends are shifting in the preference for last-minute bookings, hotels say

Labour Party European Parliament manifesto: What’s in it for businesses?

May 17, 2024
by Anthea Cachia

Looking ahead, Prime Minister Robert Abela pledges new opportunities on the commercial and social sphere

WATCH: MEPs in dialogue – Enhancing Europe

May 17, 2024
by Helena Grech

The fourth in a series of debates designed to engage citizens in the lead-up to the MEP elections