Issue link: https://maltatoday.uberflip.com/i/1518068
3 maltatoday | WEDNESDAY • 27 MARCH 2024 NEWS Court orders €111 million compensation to National Bank of Malta shareholders Echo of 1973 nationalisation of National Bank of Malta: 82 shareholder claims must be paid €111 million by the State, says judge CONTINUED FROM PAGE 1 Strong winds and rough seas were battering the area at the time. A police statement said four di- vers managed to make it to shore on their own, while the rest had to be rescued by the army and the civil protection. Four male divers were hospital- ised with one of them being cer- tified dead sometime after. The medical condition of the other three divers is not yet known. Magistrate Gabriella Vella is holding an inquiry and police in- vestigations into the incident are ongoing. In a brief statement the AFM said all 18 divers were account- ed for in a search and rescue op- eration that lasted almost three hours. It is not known whether the rescued divers were already in the water or still on the boat when the call for help reached the police. The AFM said the divers were out on the Rożi dive wreck site, which is situated just off the Ċirkewwa coast. The Gozo Channel ferry oper- ations were suspended for some time while the search was ongo- ing. A CPD rescue boat searches for the divers off the Cirkewwa quay (Photo: James Bianchi / MaltaToday) Male diver died after reaching hospital An AFM helicopterparticipated in the rescue operation in Cirkewwa (Photo: James Bianchi / MaltaToday) THE heirs and shareholders of the defunct National Bank of Malta, the nationalised forebear of Bank of Valletta, are entitled to €111 million in compensation, a Maltese court has ruled after 42 years since the bank went under government control. Mr Justice Joseph R. Micallef ruled in favour of two cases deaing with the same constitu- tional claim filed by two groups of NBM shareholders back in 1992, for the government to pay €44 million in compensation to 33 separate shareholding claim- ants, and €66 million to another group of 49. The National Bank was na- tionalised after a run on its re- serves in December 1972 by depositors that were spurred by massive withdrawals from government-owned companies. Shareholders, many of them linked to Malta's old nobility, were left without any compensa- tion by the Mintoff administra- tion of the time. The Court ordered that the compensation be paid out by the Prime Minister and the Ministry of Finance, as the defendants in the case. Orginally, the NBM sharehold- ers had submitted a claim for €325 million in compensation. Government consultants howev- er insisted in the courts that the valuation was based on "unreal- istic and invalid assumptions… This fails to recognise the suc- cess of BOV was due primarily to the ownership of GOM which restored public confidence in the bank by fully guaranteeing all de- posits which NBM would have been unable to do." In October 2014, a Constitu- tional Court confirmed a court decision that found that the shareholders' rights had been breached when they were forced to surrender their shares, over- night, without any compensa- tion. It was a harrowing example of the late Dom Mintoff's un- compromising, and heavy-hand- ed style of government. Another decision upheld by the Consti- tutional Court later recognised that the shareholders were enti- tled to compensation. The Maltese government's contention has always been that when the National Bank of Malta fell victim to a depositors' run in December 1972, its shares were worthless. The National Bank of Malta was hit by a run on its reserves back in December 1972. The Central Bank of Malta had refused to act as lender of last resort, allegedly blocking attempts by Barclays Bank to loan money to the NBM. In four days, the run on the bank saw enormous withdrawals total- ling at least Lm2.5 million. Around 350 shareholders later lost their shares after they were forced to sign them over to the government, without compen- sation. Prime Minister Dom Mintoff had threatened in par- liament to extend the liability of the shareholders, extending it beyond the bank's capital to their personal assets. In an address to the nation on TV, Mintoff com- pared himself to a cowboy "firing a shot in the face of a cattle stam- pede" to stop the run on the bank by nationalising it. Upon takeover, a Council of Administration produced a bal- ance sheet claiming a negative equity of Lm253,000. The NBM shareholders claim this was achieved by excessively inflating the bank's doubtful debts, and through a property index that devalued collateral for the loans issued by the bank. The Nationalist government had at one point offered the Na- tional Bank of Malta's sharehold- ers €25 million for the shares they signed over under duress on the eve of the 2013 election. "Any government should see what the fair value of the shares are before a court gets to decide how much compensation the National Bank shareholders will get," he had told this newspaper. MATTHEW VELLA mvella@mediatoday.com.mt