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MaltaToday 11 May 2022 MIDWEEK

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6 NEWS maltatoday | WEDNESDAY • 11 MAY 2022 NEWS BOV must face shareholders over Deiulemar, Labour MEP Alfred Sant says MATTHEW VELLA Labour MEP Alfred Sant has joined the chorus of disapprov- al for Bank of Valletta's plans to avoid a potentially embarrassing and very public fall-out with its shareholders. Sant said BOV had to hold its AGM and said complaints by independent candidate Arnold Cassola and his insistence on a physical AGM for shareholders to explain the Deiulemar fiasco, were "spot on". "On all counts, BOV directors have got to show they are ac- countable and not hide behind the screen of COVID-19 restrictions that no longer apply, in order to avoid an open tit-for-tat public discussion with their own share- holders," Sant said. BOV had to fork out €182 mil- lion in an out-of-court settlement with Italian bondholders of a de- funct shipping company that used the Maltese bank to hive off its monies in a trust. Cassola, a shareholder in the bank, protested that the directors were using COVID-19 as a cover to hold a remote AGM, with ques- tions submitted to it in writing be- forehand. Alfred Sant however agreed with Cassola's complaint. The Labour MEP said that BOV had been la- bouring under problems stem- ming from the fall-out of the 2008 financial crisis, the pressures from anti-money laundering rules, Eu- ropean Banking Union strictures, and digitisation investment. "But some of the big problems it faces have been self-inflicted," Sant said. "The board cannot continue to function with busi- ness-as-usual approaches and not explain face-to-face with share- holders how/why/when things got out of hand... and where the responsibilities for what is hap- pening lie," he said on Facebook. "Skimping annual general meet- ings is no way to run a business, especially when shareholders and depositors have been – still are – so badly mauled by how the bank has operated in past years." BOV has said it will not face the public in a physical annual general meeting, to stick to original plans to hold a remote AGM for a third successive year, despite calls for management to clearly explain its role in the Deiulemar litigation. In an email exchange, BOV chairman Gordon Cordina said preparations for the AGM had been ongoing for months and that the decision was taken prior to the announcement of removal of COVID measures. Cassola initially asked Cordina to revise the 2 June AGM, to allow shareholders to speak to direc- tors over suspicions of financial mismanagement that culminated with the Deiulemar €182 million settlement, half of the original €363 million claim. Shareholders will be unable to question directors about the set- tlement in a remote setting, with questions having to be sent in be- forehand, in writing, with no op- portunity for follow-up. Cassola replied that the bank had duped shareholders, and that it would use the remote AGM to "divide and conquer" sharehold- ers. "The bank cannot get away with answering questions in writ- ing. Present and past chairmen and directors have to be physi- cally present in a public and open meeting," Cassola said. Cassola said that he and oth- er shareholders wanted answers and explanations on the due dil- igence proceedings done in rela- tion to the 2009 decision to open the Deiulemar trust; and issuing misleading statements to share- holders, who will foot the €182 million litigation bill, while bank directors from 2009 onwards "did not forfeit one cent of their emol- uments". According to the bank's rules, executive directors can have their remuneration reversed for up to seven years from their date of as- sessment in cases related to a fail- ure of risk management, among other things. Bank of Valletta 'did nothing wrong' When interviewed on TVM News Plus' Xtra on Monday night, BOV chairman Gordon Cordina said the bank did nothing wrong in the Deiulemar case, despite reaching an out of court settle- ment for €183 million. He said the decision to settle rather than pursue litigation was intended to close the chapter once and for all and allow the bank to focus on the future. "We had expert advice from ex- ternal lawyers that the bank had no blame to shoulder but we had no guarantee on how the courts in Italy would decide the case and opted to cut our losses rather than come before our shareholders in two or three years' time with a bill of €363 million plus interest," Cordina said. Deiulemar was an Italian ship- ping company that went belly up leaving thousands of families from a village near Naples penniless af- ter they had invested in company bonds. Company directors had been accused of fraudulent behav- iour in Italy. Deiulemar had used BOV's trust services and bitten bondholders sued the bank to recoup their money. An Italian regional court had found against BOV, which the bank appealed. Pending the out- come of the appeal, BOV had to place €363 million in escrow. Last week, the bank announced it had reached an out of court settle- ment with the victims amounting to €183 million despite repeatedly having said it had a strong case. But Cordina was unfazed, insist- ing that despite the settlement, the bank was not accepting guilt. "We closed this case once and for all to continue with our life," he added. Asked who was to blame within the bank for the Deiulemar case, Cordina insisted the bank had no blame to shoulder but explained that the level of due diligence re- quired of banks became tougher over time. "The due diligence we have to- day is incomparable to what it was 20 years ago and the nature of business that led to the Deiulemar case is no longer sought after by banks and not just BOV," Cordina said. Alfred Sant, Gordon Cordina and Arnold Cassola TWO clients of deceased notary Ivan Barbara are claiming that his widow lied in a court application and are asking the police commissioner to investigate her. In a complaint filed on Tuesday, Simon and Lucianne Mallia referred to the sworn reply by the widow Rosanne Barbara Zarb to their court application in which they had requested a magisterial inquiry. The couple are alleging that Barbara Zarb "lied" and should be investigated and charged for perjury. The complaint was signed by lawyer Da- vid Bonello and comes in the wake of the ongoing saga involving Barbara's clients, who were left high and dry after he died. Barbara died in India last year from COVID-19 while on a journey with his wife to adopt a child. Clients who had used his notarial servic- es for promise of sale agreements were left without their deposits running into thou- sands of euros. In August last year, Barbara's clients had asked the court to initiate a magisterial in- quiry whether their funds were misappro- priated or fraudulently used by the notary and his wife. In January this year, 23 of the notary's cli- ents sued Barbara Zarb, in a bid to recover some €165,000 in deposits and unpaid tax- es related to property contracts. When the court application was filed, Barbara Zarb had informed them that their request to get back deposits left with her late husband would be delayed due to complications in the issuance of Barbara's death certificate, caused by the fact that he had died in India. However, even after the certificate was issued, Barbara Zarb continued to react to their requests for reimbursement by say- ing that the "process was still underway". Another notary who previously worked in Barbara's office eventually informed them that Barbara Zarb had renounced her in- heritance. The former clients also claimed that they had evidence that Barbara's office con- tinued to operate after his death and that Rosanne Barbara Zarb had "performed acts as though she was an heir and there- fore had tacitly accepted her husband's in- heritance". They asked the court to order Barbara Zarb to repay the money owed to them with interest. Cheated clients ask police to investigate dead notary's widow for alleged perjury

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