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9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 B ank of Valletta shareholders are owed a detailed explanation on the Deiule- mar case and this can only be done in a physical annual general meeting. With all COVID-19 restrictions having been lifted, there is no longer an excuse to hold the AGM online thus limiting the in- teraction of shareholders with the board. BOV has enough time to revise its deci- sion to hold the AGM online and instead opt for a proper face-to-face meeting. It can also take a leaf out of Malta Internation- al Airport's AGM, which adopted a hybrid format. It is true that directors and senior man- agement may face an embarrassing public fallout with shareholders over the Deiule- mar case but it is only in such a setting that investors can ask questions and demand answers. e bank announced last week that it reached an out of court settlement with Deiulemar bond holders to settle the litiga- tion with a €183 million pay-out. e bank's chairperson Gordon Cordina has gone on record saying that this was the best way out of this case since it closed the chapter and allowed BOV to move forward. Cordina went as far as saying the origi- nal claim running in access of €300 million poised an existential threat for the bank if it lost the case in the Italian courts. BOV already lost the case in the first in- stance and was appealing it. Cordina has insisted the bank did nothing wrong and the settlement was not an ad- mission of guilt. is reasoning by the bank's chairperson may justify the settlement, expensive as it may be but it does not exonerate the bank from giving a clear explanation to its share- holders. It is not enough for Cordina to say that BOV did nothing wrong. Someone, somewhere had approved of the bank taking on Deiulemar as a client through its trust services at some point in time. Shareholders have a right to know what type of due diligence was carried out; who performed it; whether Deiulemar was given any special treatment or whether it is a matter of lax due diligence at a time when financial regulators were less stringent on controls. Shareholders also have a right to know why Cordina is now claiming that the full extent of the law suit could have poised an existential threat to the bank when just a few years ago, BOV was arguing exactly opposite. Shareholders also have a right to know how the settlement figure was reached and whether it was the best in the circumstanc- es. ere may be perfectly plausible answers to all these questions that justify the final decision and past decisions, taken in a com- pletely different financial landscape. But shareholders are entitled to have this information at hand because at the very least it will help them understand what changes the bank has implemented since then to minimise such risks. COVID-19 and inexistent restrictions must not be used as tools to stifle confronta- tion and pull a drape over the transparency shareholders expect their bank to uphold. e calls made by Arnold Cassola, a BOV shareholder, and former prime minister Al- fred Sant, for BOV to hold a physical AGM where explanations are given, are not only reasonable but necessary. e bank, which is undoubtedly a key player in Malta's economy, and in which government has a golden shareholding of 25%, needs to come clean over this case so that in can move forward with serenity. Small shareholders account for 65% of BOV's make-up and their fragmentation must not be taken to mean weakness. If the bank persists in retaining an on- line-only AGM, it will send out the wrong message that the bank's directors do not value their own shareholders. In Sant's own words: "e board cannot continue to function with business-as-usu- al approaches and not explain face-to-face with shareholders how/why/when things got out of hand... and where the responsi- bilities for what is happening lie." Postponing the general meeting by a few weeks, to ensure the full participation in an AGM, would send a clear message that the bank is really turning a new leaf. BOV get your act together 12.5.2022

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