Issue link: https://maltatoday.uberflip.com/i/240181
10 News maltatoday, SUNDAY, 12 JANUARY 2014 'Do the right thing', shareholders tell go With the Constitutional court declaring that the 1973 transfer of shares of the National Bank of Malta constitued a breach of the shareholder's human rights, the stage is set for a longoverdue settlement. RAPHAEL VASSALLO on the implications of a 40-year-old injustice ON Thursday 9 January 2014, Mr Justice J.R. Micallef finally handed down a historic judgment in a Constitutional Court case that had been originally filed in 1977 – almost 40 years earlier – and which had been deferred by various judges ever since. The case concerned the methods used by the government of the day to coerce (following Thursday's ruling, the word can now be used in no uncertain terms) shareholders of the National Bank of Malta into handing over their shares to government for zero compensation in 1973, in breach of the Constitution of Malta. The details of the case are perhaps too complex to go into here – there were over 300 shareholders in the NBM, and all have stories to tell – but Thursday's Constitutional Court ruling finally puts the entire picture into considerable perspective. Shareholders originally claimed that they had been made to transfer their shares under duress, namely in the form of a threat by former prime minister Dom Mintoff to remove their limited liability. This would have made them personally liable for any losses incurred by the NBM, at a time when: a) depositors were withdrawing their money en masse (Note: shareholders also claim that the 1973 run on NBM had been artifically engineered by government specifically to devalue the bank and facilitate its takeover); b) the bank's lucrative assets were being devalued to nothing, and; c) its loans were being reclassified as 'unrecoverable'. Forty years on, the Constitutional Court has finally reached its verdict, finding the government guilty of violating articles 37 and 42 of the Constitution, and of breaching the shareholders' human rights. The rights stuff Max Ganado, who provided legal counsel to the NBM shareholders, welcomes this verdict as a long overdue acknowledgment of an injustice. "This is a great opportunity for our country to correct past wrongs and do the right thing. For too many years this issue has been put aside as the government continued to take great assets and business taken over in 1973, through annual dividends and capital gains on sale of shares." This profit, Ganado estimates, runs into "millions and millions of euros". "No one in our governments had the decency to offer fair compensation. The value of addressing this injustice is so much greater when the parties do so voluntarily. Court judgements are good but they don't necessarily re-establish proper standards. How can our governments expect people to be Bank of Valletta was created by the Maltese government after it nationalised the National Bank of Malta honest, pay their taxes, not steal and plunder the assets of others when they themselves show they are totally insensitive to the human rights relating to the property of its citizens?" Ganado urges government to 'do the right thing' in the light of the court ruling. But there is perhaps slightly more to the picture than the issue of a government violation of the original shareholders' human rights. The NBM may no longer exist as a bank, but a new governmentowned bank was promptly formed from its ashes: the Bank of Valletta, which in 1974 took over all the NBM's assets (including immoveable property) after these had only just been valued as 'worthless'. Curiously, however, the Bank of Valletta immediately began to register profits (as in fact the NBM had for years – 1972 having been its most profitable year ever); and not only did the previously 'worthless' assets suddenly acquire considerable value for its new owner, the government of Malta… but debts that had been previously been classified as 'unrecoverable' were nearly all recovered in full. Among the companies whose debts were deemed unrecoverable in 1974 were some of the foremost commercial enterprises of the island, many of which went on to "The solution has always been easy as the government is still sitting on a large proportion of the shares in Bank of Valletta which still continues to enjoy the properties of the National Bank" – Max Ganado post huge profits in the decades that followed. Fast-forward to 1992 – five years after a change in government that was supposed to right wrongs by the previous administration in the name of 'work, justice and liberty' – and not only did the incoming Nationalist administration under Eddie Fenech Adami fail to compensate the shareholders for their shares in NBM; but in 1992 finance minister George Bonello Dupuis announced that government would be selling many of its own shares to the greater public… which hungrily lapped up the opportunity to buy shares in an immensely profitable bank which can now, following Thursday's ruling, be declared to have been acquired and retained illegally. Ganado points towards this avenue as a possible example of what he means by 'the right thing'. "The solution has always been easy as the government is still sitting on a large proportion of the shares in Bank of Valletta which still continues to enjoy the properties of the National Bank. Many shareholders did the right thing when they put the interest of depositors, employees and business first, before their own. This was a moral decision. Now is the time for the government to show it too can take a moral decision and do the right thing. This should have