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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 1.6.2023 T he National Development and Social Fund (NDSF) has finally appointed two directors to the board of Lombard Bank. It took the NDSF five years to reach this point. e NDSF, Malta's equivalent of a sovereign wealth fund, acquired a 49% stake in the private Lombard Bank in 2018. e investment, valued at just over €51 million, was intended to facilitate the exit of the now-de- funct Cyprus Popular Bank. e move was a measure to safeguard the domestic position of Lombard Bank, which is the owner of Malta's major postal service, Maltapost. At the time, the NDSF had said that the acquisition was not a strategic investment but intended solely to facilitate the exit of the Cypriot shareholder. e fund's board of governors had said that the decision was in line with the NDSF's founding regulations to support business and enterprise. e NDSF had also confirmed that it did not intend to increase its holding in Lombard Bank, nor to act in concert with any other sharehold- ers. e fund made it clear it had no intention of exerting influence on the bank's operations despite its hefty shareholding. e NDSF's investment was intend- ed to be a temporary one, however, five years down the line the fund did not divest itself of the shareholding. e conditions may not have been right and the temporary became semi-permanent with the NDSF taking a back seat throughout these years until last November that is. In November, the fund blocked a move by the directors of the bank to issue new shares thus diluting the stake of existing shareholders. e NDSF, with its original intention not to influence matters would have seen its stake lose value. e NDSF objected and wanted the rules changed to have such a resolu- tion pass with a 75% majority, pro- ceeding to block the exercise during the annual general meeting. e NDSF argued that the bank's directors did not have the authori- sation to issue and allot new shares without first consulting shareholders. In a bold move, the fund cut short the plans pushed by Lombard CEO Joe Said. At the time, the NDSF was caught unaware of the move, raising ques- tion marks over the judiciousness of not having directors on the board despite its hefty shareholding. In- deed, the NDSF is the largest single shareholder in Lombard Bank and it makes sense for the fund to have its own directors to be able to influence policy decisions, or at the very least keep abreast of the manoeuvres con- cocted by the other directors. On Monday, Lombard Bank an- nounced that the NDSF appointed lawyer John Bonello and Chamber of SME's president Paul Abela as directors. Given the public nature of the NDSF and the importance of max- imising returns from its investments to bolster the fund, whose primary source of income is a share from the golden passport scheme, the decision to appoint its own non-executive directors is both salutary and logical. e ultimate aim of the NDSF should be to divest its shareholding or reduce it significantly but while it waits for the right moment and the right investors to come along it should not be sitting idly. NDSF right to appoint Lombard directors

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