Issue link: https://maltatoday.uberflip.com/i/1313317
5 maltatoday | SUNDAY • 29 NOVEMBER 2020 NEWS PAUL COCKS A lengthy legal battle for hundreds who invested in Bank of Valletta's La Valette Multi-Manager Property Fund has finally come to an end – and one they did not de- sire – as an Appeals Court ruled in favour of the bank. A final few appeals – around 28 – filed by Bank of Valletta ended with the Court overruling a previous decision by the Ar- biter for Financial Services, which had de- cided in favour of the investors. The same had happened back in Decem- ber 2019 and January this year, when more than 400 similar cases filed by stockbroker Paul Bonello of Finco Treasury Manage- ment and law firm Refalo Zammit Pace in July 2016 on behalf of disgruntled inves- tors, were also ruled in favour of the bank. In all instances, the Appeals Court ruled that a settlement agreement signed be- tween the bank and property fund in- vestors in May 2011 was not a matter of review for the court in terms of the EU's Unfair Contract Terms Directive. "Let's be clear, the court did not say that BOV did not act against the fund's pro- spectus or that the bank had performed well," Bonello told MaltaToday. "The Court felt that the settlement was not a consumer contract and therefore not gov- ernable by the Unfair Contract Terms Di- rective." This is now the end of the road for 400-plus investors who had sued BOV after losing their savings when they had purchased shares in the supposedly low- risk La Valette property fund for up to €1.1650 per share plus initial charges. But the Malta Financial Services Au- thority fined BOV six times between 2011 and 2012 for misselling the fund to inex- perienced investors. The bank was also sanctioned for breaching its own investment restrictions when it invested €17 million in the ill-fat- ed Belgravia European Property Fund. Some 2,300 investors accepted the bank's offer of 75c per share and waived legal action against the bank should the MFSA find BOV had breached fund con- ditions. The rest took the case to the Arbiter for Financial Services claiming that the 75c share offer by the bank in 2011 was in- sufficient. In February 2018, the Arbiter found BOV guilty of misselling and break- ing investment restrictions and ordered the bank to repay more than €3.4 million plus legal interest to the investors. The Arbiter ruled that the bank's take-it- or-leave-it offer of 75c per share prohib- ited the complainants from negotiating the terms of the contract they were about to sign and that the offer was in breach of consumer rules. But the bank appealed the Arbiter's de- cision and the Court ruled in its favour. These last cases, adjudicated between 16 September and 11 November, were orig- inally brought against the bank by indi- vidual investors who were not part of the class action filed by Bonello. In some cases, the loss in investors' sav- ings was significant. Mario Ciantar, for example, had invest- ed €18,000 in the fund. He had accepted €7,741.30 from the bank in settlement, but then sued for €10,098.61. He had only earned €149.66 in dividends from his in- vestment. Anthony Cassar had invested €17,280 and had recouped only €7,362.99. He earned no dividends and had filed a claim for €1,884.79. Emmanuel Vella had invested €40,001.92 in the fund, earned €2,301.37 in dividends and had obtained €28,600.22 in the settle- ment with BOV. He had sued for the re- maining €10,098.61. Pauline Abela earned €619.92 in divi- dends on her €18,937.64 investment. The bank paid her back €11,969.01 and she had sued for €6,384.71. A vast majority of those who invested in the La Valette Multi-Manager Proper- ty Fund, losing most of their investments and savings, are now in their 60s and 70s. Property fund investors lose reimbursement battle 2011: investors convened by stockbroker Paul Bonello to prepare for legal action