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MaltaToday 11 May 2022 MIDWEEK

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IN 1992, Bank of Valletta became the first public company to be listed on the Malta Stock Exchange. Instead of being privatised, lock stock and barrel, and sold to foreign groups whose priorities lay elsewhere, this Maltese bank was 'popularised' through the issue of shares to the general public. This has ensured that the Bank remains deeply root- ed in the Maltese financial eco-system. Today, the public owns 65% of the bank's shares, while the gov- ernment has retained a 25% shareholding: with the remaining 10% owned by the Italian UniCredit spa. This leaves us in doubt as to the majority share- holding lies; and as such, it is imperative that the bank's true owners are valued, respected and listened to. Moreover, shareholder scrutiny is one of the checks and balances required to avoid the repetition of a number of self-inflicted mistakes committed by the bank's management. Therefore, Bank of Valletta's decision to hold its an- nual general meeting remotely - weeks after the lifting of COVID regulations – sent out the wrong message, that the bank's directors do not value its own share- holders. In a remote setting, shareholders will be unable to question directors appropriately: with questions hav- ing to be sent in beforehand, in writing, with no op- portunity for follow-up. It is, indeed, an affront to the institution's identity, as a bank owned by hundreds of small shareholders. Moreover, the general meeting comes in the wake of an out-of-court settlement, in which BOV had to fork out €182 million to Italian bondholders of a defunct shipping company that used the Maltese bank to hive off its monies in a trust. And while the settlement may have actually spared the bank f a worse fate – having initially been on the hook for €370 million - explanations are due to share- holders, regarding what led the bank in to this pre- dicament. For the bank is paying dearly for a decision, in 2009, which saw it taking over a trust that held €363 mil- lion in assets of the Deiulemar company. When the company filed for bankruptcy in 2013, bondholders turned to BOV to recoup their lost savings. BOV chairman Gordon Cordina's justification – that preparations for the AGM had been on-going for months, and that the decision was taken prior to the announcement of removal of COVID measures – sounds hollow, and suggests that the bank is not keen on transparency. It therefore not surprising that two respected po- litical elders, from entirely different political back- grounds, have joined forces to question the bank's decision. Arnold Cassola, who is himself a BOV sharehold- er, first raised the issue. "The bank cannot get away with answering questions in writing. Present and past chairmen and directors have to be physically present in a public and open meeting," Cassola said. He added that he and other shareholders wanted an- swers and explanations, on the due diligence proceed- ings in 2009; and for issuing misleading statements to shareholders, who will foot the €182 million litigation bill, while bank directors from 2009 onwards "did not forfeit one cent of their emoluments". Elsewhere, former Prime Minister Alfred Sant also took to Facebook to express his support for Cassola. "Skimping annual general meetings is no way to run a business, especially when shareholders and deposi- tors have been – still are – so badly mauled by how the bank has operated in past years," Sant commented. Sant also notes the BOV has been labouring under problems stemming from the fall-out of the 2008 fi- nancial crisis, the pressures from anti-money laun- dering rules, European Banking Union strictures, and digitisation investment. "But some of the big problems it faces have been self-inflicted," Sant added. "The board cannot contin- ue to function with business-as-usual approaches and not explain face-to-face with shareholders how/why/ when things got out of hand... and where the respon- sibilities for what is happening lie." Postponing the general meeting by a few weeks, to ensure the full participation in an Annual General meeting, would send a clear message that the bank is really turning a new leaf. Now that most COVID-19 restrictions have been lifted, one also expects all major institutions to hold important meetings - like public hearings and AGMs - in a way which ensures full scrutiny and transpar- ency. Unfortunately, however, the pandemic has provided a convenient excuse for institutions to literally hide behind a screen, to avoid confronting the public. For example: the Planning Authority still holds its public hearings remotely, in a way which not only penalizes those who lack access to the technology re- quired; but also saves board members from the em- barrassment of facing angry objectors. Online meetings, which were justified by the risks posed by the pandemic, are still no adequate sub- stitute for physical meetings. This is because online meetings widen the distance between officials taking very important decisions; and the people who will be impacted by those decisions. They also reduce the effectiveness of community participation, where groups of residents, shareholders and activists often organise themselves to participate in such meetings collectively (something that is much less impactful, when people are all alone behind a computer.) It is therefore crucial that the 'return to normality' in business is also matched by a return to normality in accountability and transparency. BOV owes its shareholders an explanation 11 LETTERS & EDITORIAL maltatoday MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING EDITOR: SAVIOUR BALZAN EXECUTIVE EDITOR: MATTHEW VELLA EDITOR: PAUL COCKS Tel: (356) 21 382741-3, 21 382745-6 Website: www.maltatoday.com.mt E-mail: dailynews@mediatoday.com.mt maltatoday | WEDNESDAY • 11 MAY 2022

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