Issue link: https://maltatoday.uberflip.com/i/1163844
4 maltatoday | SUNDAY • 8 SEPTEMBER 2019 MATTHEW VELLA TALKS between Bank of Val- letta and the Swedish pensions authority over an alleged set- tlement on the Falcon Funds fiasco have ended abruptly, as lega l steps could ensue. The bank was the custodian of a Maltese private pension pro- moted to Swedish savers, which was said to have lost around €80 million in savers' cash due to bad investments when the fund was taken off the Swedish pension platform. Since then, the Swedish pen- sions authority has given notice to BOV that it will hold it re- sponsible for damages, having been the custodian of the fund. One of the officials at the Swedish pensions authority told business newspaper Da- gens Industri that talks with BOV had led nowhere and that the authority had reached the end of the road on negotiations. "They said the accusations are purely ridiculous," Henrik Borg said, who said an offer was mooted that was not far off from the Swedish author- ity's position. "The negotia- tions were at a very high level, and they gave the impression of being very serious. It turned out to be just a delaying tactic, that is, a really nasty negotiat- ing game." The pensions authority is ready to sue BOV and had al- ready filed a judicial protest against the bank and several other people implicated in the Falcon Funds fiasco. But the authority's head of legal, Anna Akesson, said in comments to the Dagens In- dustri that litigation would be costly at 2% of the disputed €73 million being claimed. "Our lawyer in Malta believes the process could take up to 20 years," Akesson said. BOV's executive for market- ing, Charles Azzopardi, told MaltaToday any negotiations between potential litigants were highly confidential "and certainly not a matter for pub- lic disclosure". He said the bank had nothing further to add to what it has already published in its annual report. The bank said the amount of the claim does not necessarily reflect its potential financial exposure if a ruling were to be made against it on this matter. In 2018 a liti- gation provision of €75 million was recognised in the state- ments of profit or loss. BOV was served with judicial letters in April, with the pen- sions authority holding the bank responsible for any losses and damages it may have suf- fered with its investment in Fal- con Funds. "The sub-funds sus- tained losses, and there could be further substantial losses, that are the result of various investments which failed, and this due to omissions [on BOV's part]… negligence and non-ob- servance of the applicable rules. The Custodian failed to honour its obligations to supervise the fund and ensure the investment manager conformed to the in- vestment objectives, policies and restrictions." Bank of Valletta has filed a judicial letter in Malta's Civil Court, in which it gave notice that it intends holding 158 indi- viduals and companies respon- sible for any losses the bank might incur on millions feared lost in the Falcon Funds pen- sions bust. The individuals include for- mer Nationalist MP and fi- nance minister Tonio Fenech, who together with Joseph Xuereb and Ian Zammit, was a director of Falcon Funds Sicav. However, investment deci- sions pertaining to the invest- ment of some €247 million in Swedish pension savings inside Falcon, were taken by Tem- ple Asset Management, an in- vestment office whose direc- tor John Anthony Farrell was recently in custody in Sweden, to face fraud charges. In Sweden, the case has been dubbed as the country's "largest economic criminal case ever", for the scale of millions lost in pensioners' savings. The case will try Max Serwin, also known as Emil Ingmanson – a one-time Sliema resident who led the creation of Falcon Funds – who is suspected of having influenced the pension fund's investment managers, Temple Asset Management of Floriana, to inject cash into sus- pect financial instruments. In Malta, an audit by KPMG revealed how TAM invested millions into illiquid financial instruments, in breach of the Falcon Funds rules, to benefit people close to Serwin. Many millions are still miss- ing from the entire Falcon Funds pool. Falcon Funds has also sued TAM in Malta, as well as Max Serwin. NEWS Swedes berate bank's 'nasty negotiation game' as delaying tactic on possible multi- million lawsuit Negotiations break down for BOV settlement on Falcon Funds fiasco Bitter swede: the Falcon Funds case is regarded as Sweden's largest economic crime ever