Issue link: https://maltatoday.uberflip.com/i/679878
maltatoday, SUNDAY, 15 MAY 2016 8 TIM DIACONO HUNDREDS of investors who lost their money in a property fund after being mis-sold by Bank of Valletta are looking to a new financial ser- vices arbiter to finally provide them with full compensation. Finco managing director Paul Bonello, who represents some 2,300 people who had invested in the sup- posedly low-risk La Valette property fund, said that he is confident in the strength of his impending case. "The facts are already established, but the bank's remedy was wrong," the stockbroker told MaltaToday, referring to BOV's partial compensa- tion granted on condition that they waive legal action against the bank. "What sort of justice is that? Is it justice if I steal €120 from you but only give you €60 in return?" BOV had eventually compensated in full those investors who refused the bank's offer, but ignored the Malta Financial Services Authority's order to bring compensation up for the other 2,300. It declined to comment on what stance it would take in light of Bonel- lo's case, with a bank spokesperson simply telling MaltaToday that it will "abide by all its obligations in accord- ance to the law". A ruling by the arbiter in favour of the investors would allow the La- bour Party to keep its pre-electoral promise of full compensation to them. Back then, the PL had prom- ised to use its power to elect BOV's chairperson to ensure that "serious negotiations" take place between the bank and the investors. How- ever, that plan hit a brick wall when its chairman of choice, John Cassar White, warned that granting further compensation would set the bank on a legal collision course with its share- holders. This prompted Paul Bonello to accuse him of changing his pre- electoral assessment of the matter "faster than a chameleon changes colours". Bonello, who endorsed Labour and addressed a party mass meeting prior to the election, advised the gov- ernment in its drafting of the finan- cial services arbiter law. However, he vehemently denied that his role as representative of the investors posed a conflict of interest. "By that token, no practising lawyer would be allowed to advise govern- ment on a piece of legislation," he argued. "My advice was impartial, granted in my capacity as a profes- sional, and based closely on UK legislation and an EU directive on al- ternative dispute resolution that has been transposed into Maltese law. "I strongly refute any suggestion that the legislation could be biased as a result of my input." He hailed the law itself as one that is "in full conformity with the princi- ples of international justice. "It's a way of telling elderly inves- tors who believe that they have been mis-sold that they can be compen- sated in their lifetime, rather than having to file a court case that can drag on for years." Indeed, the new law obliges the arbiter to make a decision within 90 days upon receiving a complaint. Exceptions are allowed for complex complaints, in which he can take up to a year to deliver a ruling. Bonello gave no set date as to when he will present the case to the arbiter, but in a public letter he has advised La Valette investors to file their com- plaints with Finco by the end of June. "This is a complex case, so it could well exceed the 90 day limit," he said. 'No reason to doubt Reno Borg's independence' The financial services arbiter is Re- no Borg, a qualified arbitrator who had unsuccessfully contested the 1996 general election under the La- bour Party ticket and was appointed BOV chairman following his party's election to government. Upon the change in government in 1998, he was nominated by Labour to serve on the Broadcasting Authority – a position he retained until his ap- pointment as arbiter. Opposition MP Kristy Debono described his appointment as one "dictated by political patronage", but Borg has denied that his politi- cal history risks undermining his in- dependence. "An arbiter worth his salt will act independently and won't succumb to government pressure," Bonello said, when asked whether he thinks Borg may be conditioned to rule in a manner that will allow La- bour to keep its pre-electoral prom- ise. "I have never spoken to Reno Borg, but I have no reason to doubt his independence." tdiacono@mediatoday.com.mt News Presenting the works of 43 photographers who visited the historic Marsa Power Station shortly after it was switched o for the last time in March 2015. www.enemalta.com.mt www.mipp-malta.com T: 8007 2224 In collaboration with A PHOTOGRAPHY EXHIBITION ILLUSTRATING THE MARSA POWER STATION At the House of Representatives, Parliament of Malta, Valletta 16 – 27 May 2016 Monday to Saturday 09:00 – 17:00 Sunday 09:00 – 12:00 ID-DAWL TAL-ISTAZZJON Insurance specialists GlobalCapital issue new bond to repay 2016 bond MATTHEW VELLA G L O B A L C A P I T A L , the insurance special- ists, will issue new €10,000,000 unsecured bonds at 5%, redeemable in 2021, to purchase its existing bonds from ex- isting bondholders for cancellation. The company had wanted to finance an upcoming bond redemp- tion in 2016 by increas- ing shareholders' capi- tal by €15 million, amid plans to bring in Italian bankers EIP plc to take over their parent company's shareholding. In 2015 GlobalCapital chair- man Dawood Rawat was forced to resign after Mauritian au- thorities accused him of running a €960 million Ponzi scheme through one of his subsidiaries, the Bramer Banking Corporation. Italian banker Paolo Catalfamo – an honorary consul-general for Mauritius in Italy – announced that his company EIP plc would acquire BAI's entire shareholding in GlobalCapital. But EIP bought the entire 8.93% shareholding of Aberdeen in Global Capital, a far cry from the 48.5% it originally had in its sights. GlobalCapital's €17 million bond issue of 2006, carrying 5.6% inter- est, is due for repayment at the lat- est by 2 June, 2016. In March 2016 GlobalCapital secured just part of the funding required for the repayment of the 2016 bond, when it generated €4.7 million through a rights issue of- fer. EIP had said it intended to finance its participation in a €15 million rights issue by raising eq- uity "from potential new investors known to EIP" even though to date there are no tangible com- mitments by third party investors. GlobalCapital has received a commitment from chairman Rob- erto Catalfamo's Investar plc to subscribe up to €5 million in the new bonds in the event that there is a shortfall, and commitments from professional investors to subscribe up to an additional €5 million in the new bonds. A fur- ther €5 million rights issue will be made following the issue of the new bond, within the next 12 months. GlobalCapital's annual report shows that company directors are confident of the successful outcome of the refinancing plans but that they are also aware of "significant uncertainties… some of which are not within their con- trol." GlobalCapital registered €5.6m (€5,606,505) in pre-tax earnings for the financial year ending on 31st December, 2015 compared to €0.8 million in 2014. La Valette investors queue for delayed justice from financial services arbiter Finco director Paul Bonello denies conflict of interest in roles defending BOV investors and advising government on financial arbiter law Finco managing director Paul Bonello (centre)