In a statement on its website dated yesterday, the bank said it had not yet received a copy of a judicial protest said to have been filed in a Maltese court earlier by some 40 investors, although it said it had received a letter on the same matter from lawyers representing a Maltese wealth manager, Finco Treasury Management. But once received, the judicial letter’s contents will be "carefully studied by BoV together with its legal advisors, and a response thereto will be filed in due course", the bank said.
In the meantime, responding to the Finco Treasury letter, the BoV said: "whilst rebutting the unsubstantiated allegations…it was willing to meet with the parties concerned to discuss and understand their particular complaints.
"Efforts have since been made to find suitable dates for such appointments."
Under Maltese law, a judicial protest is a way of keeping alive the option of filing a legal action which otherwise would expire with time.
In their judicial protest, an English-language translation of which was provided to International Adviser, 40 investors who described themselves as mainly "old age persons in their pensionable age" with "no financial background, expertise, training or experience in the financial sector" claimed that the bank has led them to buy riskier investments than they were told at the time.
These securities, the investors said in their protest, "were neither suitable nor appropriate as required in terms of law and best market practice".
The actions by the investors, Finco and the BoV yesterday and today, which were reported in the Times of Malta and Malta Independent, came less than three months after the resolution of a dispute involving investors unhappy with the performance of their investments in a poorly-performing fund joint-owned by the Bank of Valletta and UK-based Insight Investment Management (Global).
In that case, the bank offered to buy back shares in the fund for €0.75 a share from 2,300 investors, who as a result of accepting the deal relinquished their right to sue the BoV.
Among the funds held by the money-losing La Valette Multi-Manager Property Fund was the Belgravia European Property Fund, one of a number of Belgravia entities managed out of Jersey by the now defunct Belgravia Asset Management.
This latest case is unrelated to the La Valette matter, according to Paul Bonello, managing director of Finco, who added none of his clients were involved in the latest action against the BoV, and that his role this time was as an adviser.
The BoV is Malta’s second-largest bank and is 25% owned by the Maltese government.
MFSA statement
The country’s financial regulator, the Malta Financial Services Authority, also issued a statement on the matter, noting that it had “for some time been investigating a number of complaints filed by consumers in respect of certain preferred securities sold to investors, including perpetuals issued by Lehman Bros” – the type of product mentioned in the judicial protest – and said it would “make a public statement on its findings and conclusions” after these investigations had been completed.
These investigations, the MFSA noted, are "now at an advanced stage”, and it stressed that it was prepared to impose administrative sanctions on any person who its investigations reveal to have contravened any provision of law or regulations.
