MaltaToday previous editions

MT 19 October 2014

Issue link:

Contents of this Issue


Page 8 of 55

maltatoday, Sunday, 19 OctOber 2014 News 9 CONTINUED FROM PAGE 1 National Bank of Malta shareholders are ex- pecting good news on October 28, when the Constitutional Court is expected to deliberate on the value of compensation they are owed af- ter signing over their shares to the Labour government in 1973, in a forced nationalisation of the bank. Yesterday, a government source told MaltaToday that Labour will not entertain any sort of "delaying tactics" when it comes to litigation in the courts. Joseph Muscat's government can be expected to score yet more politi- cal points if shareholders are award- ed compensation without any delay, after having spent decades locked in protracted court proceedings. "We have not yet decided whether we will be going for an out-of-court settlement," a government source said. On her part, one of the repre- sentatives of the National Bank shareholders' committee, Milica Micovic, told MaltaToday on Friday that shareholders have always been willing to settle for an out-of-court settlement that is fair. "There has never been a formal meeting so far – only informal talks with Owen Bonnici, who appreciat- ed the unacceptable duration of our cases. He said that he would refer the matter to higher powers. "In view of the fact that the judg- ments were positive in regard to the shareholders' claims, it might make sense that an out-of-court settle- ment acceptable to both parties be reached. We are willing to listen." On Thursday the Constitutional Court rejected an appeal by the Mal- tese government, on a decision by a civil court in its constitutional juris- diction, that found that the rights of National Bank of Malta sharehold- ers had been breached when they were forced to surrender their stakes without any compensation. A second decision also rejected an- other appeal on a court decision that decreed that shareholders' constitu- tional rights had been breached and that compensation was due. The judgment by Mr Justice Joseph Micallef, originally in January 2014, arrived over 40 years after the gov- ernment led by the late Dom Mint- off nationalised the National Bank, which became Bank of Valletta in 1974, after a run on the National Bank's reserves. The case was instituted by 49 shareholders and their heirs in 1992 against the prime minister, the fi- nance minister and the Council of Administration that ran the bank shortly before its nationalisation. The courts will now have to deter- mine the level of compensation due to the shareholders. In 2005, informal discussions be- tween Investments Minister Austin Gatt and the National Bank share- holders were held over a reported Lm8 million compensation package to the shareholders. "In respect of the offer made by then Minister Austin Gatt through our lawyers, of Lm8 million, this was a verbal offer," Micovic told Malta- Today. "This offer was put to the share- holders at a general meeting and re- jected by the overwhelming majority. It was considered a risible amount by many." Micovic however said that the offer made in early 2013 by finance min- ister Tonio Fenech, did not give the shareholders enough time to con- sider the proposal. "It was a rather complex document [and] our legal and financial teams did not have enough time to consider the implica- tions. By then there was a change of government." "Today many Maltese do not re- member the National Bank saga, indeed many of the original share- holders are now dead and the cur- rent shareholders are first- and sec- ond-generation shareholders – heirs of the original ones. Many of them remember the cruel, vindictive and unjust way in which the then gov- ernment forcibly appropriated their shares and the National Bank of Malta. Many of them lost their busi- nesses and their livelihood. Many watched their parents and grandpar- ents being broken," Micovic said. "It is surely now time – and it will be to this government's credit – to settle this longstanding injustice per- petrated against its own citizens. The shareholders have never expected any favours from any government. They have always been reasonable in their demands and only expect what is justly due to them after a 40-year wait." The National Bank of Malta was hit by a run on its reserves back in De- cember 1972, but its original share- holders claim the Central Bank of Malta had refused to act as lender of last resort, and even blocked at- tempts by Barclays Bank to loan money to the NBM. In four days, the run on the bank saw enormous withdrawals totalling at least Lm2.5 million. Around 350 shareholders lost their shares after they were forced to sign them over to the government, with- out compensation. Prime Minister Dom Mintoff had threatened in parliament that if the bank's directors refused, he would remove the limited liability of the bank's shareholders, extend it be- yond the bank's capital to their per- sonal assets, and withdraw the four million pounds in parastatal funds which were deposited at the bank. 'Nationalist offer was complex, not enough time to study proposal' SENIOR POLICY OFFICER Tonio Fenech's offer was overtaken by the change in government

Articles in this issue

Archives of this issue

view archives of MaltaToday previous editions - MT 19 October 2014