Various articles that appeared on the Times Of Malta April 2012

National Bank of MALTA Saga

The Mintoff government was typified by years of aggressive take-overs, corruption, a police state, violence and almost bringing Malta to its knees

1972 - The Dark years ahead, in his typical pose and together with his usual mob

Lino Spiteri - National Bank of Malta Saga

Jeremy Cassar Torregiani - Former grandson of the Chaairman takes Lino Spiteri to Task

Peter Dacoutros - Blacknight in bank history (1)

Marie Attard Monatlto - Blacknight in bank history (2)

Robert Hornyold-Strickland - Reflections after watching "Dear Dom"

Anthony R. Curmi - Justice over National Bank

Raphael Vassallo (Malta Today Part 2) - National Bank of Malta revisited | A Republic built on injustice?

Christan Peregin (Times Of Malta) - Row over bid to drop National Bank case

We were right all along, the Bank of Valletta did stop the printing of a book about the Bank's History, read more here by Professor Henry Frendo

Neville Curmi - When will the National Bank of Malta saga come to an end? 
The saga of the National Bank of Malta




Bank ‘could have been rescued’ by Dom Mintoff

There was no sense of justice – Prof. Henry Frendo

Dom Mintoff could have saved the National Bank from the trouble it faced in the early 1970s but resorted to threats to take it over instead, according to unpublished research by history professor Henry Frendo.

Two decades ago, Bank of Valletta commissioned Prof. Frendo to carry out an extensive study into the bank’s history but stopped the book as it was going to print in 1993.

“They never told me why. I asked for reasons but I was never told in writing,” he told The Sunday Times 20 years later, as interest in the National Bank saga is revived following a recent documentary film about the former Prime Minister.

Shareholders are still fighting for compensation over the savings and investments they lost when Mr Mintoff’s Labour government took over the National Bank in 1973 and set up Bank of Valletta, rather than allowing the Central Bank to act as a lender of last resort.

The shareholders are meeting tomorrow to establish a common front for negotiations with the government on an out-of-court settlement. Last week, The Sunday Times reported that the government has tried to drop the 35-year-old case by claiming it is time-barred.

In another twist, a footnote in Prof. Frendo’s new book Europe and Empire confirms long-standing rumours that his book about BoV’s history was pulled on a “belated legal instruction” from a “compliance committee”.

“I have every reason to believe it was not the decision of the chairman or the director of corporate affairs, because both of them had read everything I wrote and cleared every word,” he said.

Prof. Frendo had full access to the archives of Bank of Valletta, set up in 1974 after Mr Mintoff forced National Bank shareholders to sign over their shares for free.

The historian believes the chapter detailing the controversial takeover, for which he interviewed many of the ageing protagonists, was the reason for stopping publication.

This, he said, would have been a “full exposé” of what happened between 1946 and 1993, including the crucial financial and political events in the early 1970s.

Prof. Frendo’s book looked into the reasons behind the mysterious run on the National Bank in 1972.

The run, he concluded, was partly the result of Mr Mintoff’s election in 1971 and the “drastic” centralisation and nationalisation policies that in turn triggered a property slump. In the meantime, Mr Mintoff was negotiating the British defence agreement with Malta.

Amid uncertainty, depositors withdrew their savings, but Prof. Frendo said the National Bank had substantial property assets that could have helped.

“This was different from what happened to Lehman Brothers in 2008,” he said, as the bank’s main problem was temporary liquidity.

Until then, the National Bank had always maintained a positive liquidity-lending ratio, Prof. Frendo argued. “It wasn’t a lost cause.”

After all, the National Bank brought together the Anglo-Maltese Bank, the Banco di Malta, and banks belonging to the Scicluna and Tagliaferro families, making it “the greatest accumulation of Maltese capital in history”.

“It was a success story. If there was something very rotten in it, it wouldn’t have attracted one bank after another to join,” said Prof. Frendo, adding that it had always stuck its neck out to assist Maltese industry.

“It had plenty of assets. There were a few cases of overlending to unreliable people, but very few,” he said.

Most of the biggest borrowers ended up making huge successes and between 1946 and 1971, capital went up by nearly 367 per cent, reserves by 452 per cent and deposits by 600 per cent.

It would have survived if the Central Bank played its role as lender of last resort as central banks are doing today.

But instead of intervening, the Mintoff government let it sink.

The Central Bank, Prof. Frendo argues, had a “legal obligation” to step in and help save the National Bank.

According to his research, the Central Bank claimed to have commissioned a full technical account of the events unfolding.

However, Prof. Frendo never gained access to this document, nor did any interested parties who asked.

Instead, as the run on the bank was happening, Mr Mintoff took to the state-controlled TV and Parliament, ostensibly to calm down depositors.

“Mintoff had a style of speaking,” Prof. Frendo said. “He was a negotiator of the first order. He would be caressing you with one hand and sticking the dagger in your back with the other.”

“In terms of political rhetoric, he appealed for calm.

“He just added that on the Central Bank’s advice, the National Bank’s activity would be suspended the following day. Calm... just calm.”

Mr Mintoff’s comments “probably” created more panic, Prof. Frendo said. On December 11, when the Prime Minister went on TV twice, a record £1.3 million was withdrawn.

“Banks are based on trust,” the professor said. If people do not trust the Central Bank to do the best thing, this begins to be eroded. “It could be a subtle process.”

The day after his announcements in Parliament, Mr Mintoff sent police officers and soldiers to all the National Bank directors with a letter demanding they hand over their shares, as confirmed by “almost identical” accounts by various former shareholders.

According to Prof. Frendo, Mr Mintoff started putting pressure on shareholders while telling the public they had already given up their shares.

“This was the strategy... It was psychological bullying. In fact, that’s a kind word. I would use threatening.

“Fear is a very important weapon used in totalitarian states. It affects your psychology, your nervous system.”

The government also objected to allowing foreign banks to help the National Bank. The shareholders were being threatened with personal responsibility if they did not comply – they risked losing their homes.

They could have gone to prison to protect their belongings but this was a time when even the constitutional court was suspended.

“There was no sense of justice... The shareholders were not keen to become martyrs and heroes and when faced with such draconian measures and attitudes, they more-or-less caved in.

“Whether that makes the whole transfer morally justifiable is another question.

“It could be legally justifiable but there is also the justice of what is right, not just the justice of law.”

Prof. Frendo said it was “sacrilegious” that the court case, first filed in 1977, had taken more than 35 years to conclude.

It is also odd that it has been presided over by so many judges and that no Chief Justice has demanded a conclusion.

“The will seems to be lacking. I think there’s a hidden hand,” he said, suggesting a possible link between the court delays and the fact his book was stopped.

The extended court case enables people to use the sub judice argument, which means the subject is legally active. “But we knew that before I started my work. Everybody knew it. They use sub judice a lot to shut you up in Malta. In this case, sub judice is indefinite.”

He suspects the National Bank case may end up in Strasbourg and – on the simple basis of “justice delayed, justice denied” – the shareholders should win.

Last week, The Sunday Times revealed that in 2010 the Attorney General filed a fresh plea, on behalf of the Prime Minister and Finance Minister, claiming the case was time-barred.

Such cases must be filed within two years of the incident.

“It took them some time to find that out, 30 years or something. It’s odd. And frankly, it stinks,” he said, adding that the Nationalist Party in opposition in the 1970s had defended the shareholders’ rights.

He said that if shareholders had up till two years after the political violence ceased to file a case, this means the period was still active until 1989 – as violence persisted until the Nationalists were elected in 1987.

Prof. Frendo, who has no shares or financial interest in the bank, said compensation has been given to people for less significant issues, such as bus drivers, dockyard workers and “people with villas near chimneys”.

“I don’t think justice is solely and simply about laws. There is a morality that may not correspond to the law. There is also the spirit of law, but maybe we have forgotten about philosophy of law.”

Prof. Frendo said he could “sympathise” with the Labour Party’s position that the government’s time barring plea should be dropped.

“Assuming this is a post-Mintoffian party, I think it makes political sense for the Labour Party to propose the plea be dropped and make the most of the situation by endearing themselves to all the shareholders and those who feel that an injustice has been committed.”

He said it would be ironic if the Labour Party remedied this injustice, but stranger things have happened in the past.

“This is not beyond the realm of the possible. Politics is the realm of the possible.”

When asked why Prof. Frendo’s book was never published, a BoV spokesman said the bank had no comment to make


National Bank Group saga

The National Bank Group saga is 38 years old and shows no sign of moving towards a legal resolution. Rather, with passing of the years while some factors remain sharp in various memories, others seem subject to inevitable distortion. There are three facets to what happened late in 1973. One is technical, the state of the bank as revealed in its reports to and inspections by the Central Bank. The other refers to government involvement when the run on it threatened to decimate the group.

The third factor concerns legal actions taken by former shareholders of the National Bank. Two Maltese fellows where intimately involved in the technical aspect that underpinned the convulsions of the group. One was Victor Lungaro Mifsud, who was the Head of Bank Inspection at the time. The inspection unit had written various reports on the situation at the National Bank which, in a nutshell, was over lent to domestic borrowers, particularly in the property sector.

The reports by Victor, a consummate professional, worried the Governor of the time no end. I do not know the fate of the reports. They should still be in the archives of the Central Bank. Mr Lungaro Mifsud passed away quite a few years ago. I do not believe he had ever been called to give evidence in any of the court actions started by former shareholders, nor whether he had been invited by the Attorney General to make a sworn statement when he was still healthy.

As Head of Research I was the other person directly involved in the technical aspect of the saga. In terms of the Banking Act banks submitted regular reports to the Central Bank’s Research Department, covering such variable as deposits, loans and advances, advances-to-deposits ratios, liquidity ratios and so on.

Research would analyse the reports and coordinate its conclusions with Bank Inspection. The conclusions were worrying, so much so that the Central Bank drew the attention of the Minister of Finance to them.

The second aspect of the saga is the run on the group and the government’s role, with the matter going up to the Prime Minister. The Prime Minister was worried by the run and its impact on the business community and the economy. He did not feel that the Central Bank should risk own funds by acting as lender of the last resort unless there was adequate security. In a meeting with the bank’s president and the general manager the latter told the Prime Minister: “Then take it, take it!” The Prime Minister said in that case things were different and triggered a process whereby most of the bank’s shares were transferred to the government. The group resumed business as the Bank of Valletta.

Legal action started not long afterwards. Amazingly, it has barely processed, so much so that postponements are not news any more. In this newspaper on Monday April 23 it was a disgusted correspondent who wrote in the letter columns that the shareholders’ case had once again been put off, to September 27. He pointed out that three linked cases were instituted in 1977 and two in 1992, “35 years of justice denied”, he wrote.

I was never called to give evidence in any of the cases, though long ago I had written articles pointing out that those of us directly involved in the matter were aging and dying off. A couple of years back the Attorney General asked me if I would give a sworn statement concerning what I knew of the case as a former Central Bank official. Conscious of the need to do so and my own advancing years I did so without delay.

Recently fresh controversy broke out with the showing of the Dear Dom documentary. In it, among other things, two allegations were made by individuals deeply hurt by what had taken place 38 years ago.

One was, effectively, that Prime Minister Dom Mintoff had instructed the Central Bank to instruct the National Bank Group to squeeze borrowers so that they would fail and their business be taken over. I was at every meeting that took place at the time. No such instructions were given, by the Prime Minister, or anybody else.

The other allegation was, again effectively, that Mr Mintoff sent bully boys to bang on shareholders’ doors to frighten them into transferring their shares to the government. Not so. The individuals who went to plead with shareholders to hand over their shares to the government were members of the bank employees’ union, hugely concerned about their job.

I fully understand the ire that surviving shareholders and relatives of the departed continue to feel. They remain deeply upset about what took place, though they may not know the full technical background. They are upset that resort to the law courts has not produced any result. In fact, has barely moved at all.

That is not correct. We have a new Minister of Justice. I suggest that he should make it his urgent business to see that the courts do their work. Not because that was what the Nationalists had promised in opposition up to 1987 or because of the current pre-election charm offensive, but because it is right and proper that they do so before the case, already cold, grows colder as nobody remains alive to talk.


Grandson of former National Bank chairman takes Lino Spiteri to task
National Sunday 29 April 2012 -

Jeremy Cassar Torregiani, the grandson of the founder of the National Bank which was nationalised by socialist prime minister Dom Mintoff, has reacted strongly to a letter published in The Times by Lino Spiteri. Spiteri - a former minister with the Mintoff government who was later 'rehabilitated' by the PN leaning media for opposing Alfred Sant - has raised the ire of Cassar Torregiani.

In a long letter he copied to MaltaToday, Cassar Torregiani said: "For Lino Spiteri to imply that the National Bank was being run badly, or that it was experiencing an internal crisis is a lie that cannot under any circumstances be allowed to prevail.

Read the full letter below:

Following the embarrassment that the National Bank of Malta case - once again portrayed in the recent documentary Dear Dom - puts on the establishment, Lino Spiteri has now written to The Times of Malta, to clarify to its readers three facets of the saga that he feels have been misinterpreted and that need to be put right. Having been so closely involved in the issue from its inception, while at the Central Bank (and also as a member of parliament, a shadow finance minister as well as finance minister... and finally, as an interviewee in the aforementioned documentary) it definitely makes sense that he does. 

As he puts it, and in his own words, he would like to clarify "three facets to what happened late in 1973. One is technical: the state of the bank as revealed in its reports to and inspections by the Central Bank. The other refers to government involvement when the run on it threatened to decimate the group. The third factor concerns legal actions taken by former shareholders of the National Bank".

To give the reader adequate background to this event, it is pertinent to mention that the National Bank of Malta was founded in 1946, just after World War II by Antonio Cassar Torreggiani who joined the then Anglo Maltese Bank and the Banco Di Malta together. Subsequently, in 1949, Joseph Scicluna et fils (Cisk) joined Scicluna's Bank in to the Group, with B.Tagliaferro and Figli also joining up with them in 1969. The reason why I emphasise this point, is to show a trend of a wholly-owned Maltese enterprise that grew from strength to strength, pooling together Maltese resources under the umbrella of the National Bank of Malta. By 1972, the bank had achieved its record year to date, with its auditors reporting a total of Lm240,000 in profit for the year and, apart from reports by the Central Bank that the group was, in their opinion, "too heavily exposed to the property market", everything was running smoothly. In 1973, the interim results actually showed an even better performance by the National Bank of Malta, and by the end of its last year of operation - i.e. 1973 - the bank's  profit on ordinary activity before provisions and extraordinary items was 32% better than its previous best ever year. For Lino Spiteri to therefore attempt to imply that the bank was being run badly or that it was experiencing an internal crisis is a lie that cannot, under any circumstances, be allowed to prevail.  

Any business that is experiencing record-breaking results cannot possibly be rendered as failing due to the sole interpretation of an 'inspectors report' which felt that the Banks's exposure to property was too high. With the added benefit of hindsight, one can today easily see just how false this argument is. For example, if I were to choose to invest heavily in gold and my stock broker brings it to my attention that perhaps my portfolio is unbalanced and that it has too much gold in it, whether this was wise or not will solely depend on the future price of gold.  

Punishing the National Bank of Malta for investing heavily in the Maltese property market is pure hypocrisy and ridiculous, especially (again) with the benefit of hindsight, as ever Maltese person knows that whoever bought property in Malta and held it from 1973 till today would be sitting on the investment of a lifetime.  
My conclusion therefore, to Spiteri's first point, is that the Central Bank inspectors would have applied a standard formula used in normal banking practice and brought this to the attention of the National Bank of Malta - that in its opinion, it was over standard banking practice at the time in its exposure to the property market. That this however, was then used as the basis for its eventual unjustifiable take over for zero compensation - not 1 cent - is the act of theft that the government of the day orchestrated to the detriment of the innocent Maltese shareholders.  

Yet again, today, hindsight only adds further weight to my argument as everybody knows that investing in the Maltese property market since 1973 cannot be considered to have been a bad investment in any way whatsoever. Unfortunately, in cases like this, nobody can predict the future with complete certainty, so even what is so obvious today to us all, would have at the time been subject to doubt. More so then, how can one condone doubt when it used solely for the sake of convenience, when only doubt on this issue was used by the government of the day to misappropriate the National Bank!

"Government involvement when the run on it threatened to decimate the group"

Come 1973, the operation of the Bank was pretty much the same except that the year started with the takeover of the Bical Bank, the only other Maltese-owned Bank at the time.
5 January, 1973 - Karmenu Mifsud Bonnici asks Cecil Pace to sign the deal with Dom Mintoff, or else face the consequences. The next day - on 6 January 1973 - Cecil Pace waited for the police to arrive, to then be taken to Kordin.
October, 1977 - Following four years of imprisonment and house arrest, Cecil and Henry Pace are then convicted for misappropriation, fraud and forgery. Cecil Pace is sentenced to 14 years, and his brother Henry to years. According to a Court registrar overhearing a telephone conversation between the presiding Judge and Dom Mintoff, it is Mintoff himself who gives the blessing for the maximum sentence allowed (See:
I would not like to get distracted by going into the merits of this case, however, the fact that Bical Bank failed and that a number of depositors were then unable to withdraw their money did lay the path for the events that would take place later on that year. It takes no genius whatsoever to understand that if a bank on the island of Malta were to fail and leave depositors without their money, that the rest of the islanders will be most wary of any future events that could place them in the same position. How the run on the National Bank actually started is not known, however it is not uncommon for rumours to run rife and as we know from markets around the world, expectation creates the reality. So much so that if for example everyone expects the price of butter to go up, then the expectation in itself creates (at least for some time) the reality. It was for this very reason that the duties of the Central Bank of Malta were specific and that amongst others, it was duty bound to act as lender of last resort. The Central Bank of Malta Act of 1967 did not stipulate in any way whatsoever, that which Lino Spiteri is implying, i.e., that government would lend under the condition that the prime minister felt that there was adequate security.

Apart from the fact that the National Bank of Malta at the time could have offered its own shares as security as well as the Lm8,000,000 in long-term securities held by the group at the time, government refused to provide.  

The Mintoffian lie, is that by doing so they would like to come across as if they acted in the public interest. That they did not put public finances at risk and as a result were responsible in their protection of public finances. The truth however is that the law at the time obliged the Central Bank to perform and by refusing to do so, it betrayed the whole banking system and tossed this very profitable enterprise into the hands of government. Of course, most people would not know these details and are not familiar with how banks work. They do not understand that in creating money, a bank relies on the fact that people will not all call in on their deposits at the exact same time and that Central Banks around the world were set up to offer an otherwise notoriously fragile system this necessary security.

The truth here is that National Funds were withheld when they were duty bound to come forward.   
It is unbelievable that Spiteri, who was there from day one when, on the 6 December 1973, he was the first person from the Central Bank to call a meeting with the National Bank of Malta delegation, can say that Dom Mintoff was actually worried about the run and did everything he could to save it. To any average person, the fact that the Central Bank refused to act as lender of last resort on the basis that he did not think it correct to risk public finances (when he was duty bound by law to do so), is ridiculous.  

Not only - hindsight then gives us the benefit to review the facts and see that all the Central Bank found which was irregular (but not remotely breaking any law in any way) was the bank's exposure to the property market, which also with the benefit of hindsight was the best investment anyone in Malta could make from 1973 to date. Facts speak volumes for themselves and on 10 December, Mintoff sent for the National Bank of Malta officials and followed the following series of events:

  • Meeting is held at 3.00pm at Castille
• He tells the National Bank delegation that he wants the shares of the bank transferred for free to the government of Malta by 5.30pm of that day.
• He threatens that unless he does he will declare a "Bank Holiday" as empowered to do by the Central Bank Act.
• Mintoff himself, personally, refuses to allow the Central Bank to act as lender and refuses the offer from Midland and National Westminister banks to lend any necessary funds.
• Mintoff then asks Dr Edgar Mizzi to draft the following instrument for the transfer of shares. In the second meeting called by 'We the undersigned hereby authorise the Board of Directors of the National Bank of Malta Ltd to transfer to the government of Malta all the assets of the Bank in consideration of the assumption by the government of Malta of all the Banks liabilities and undertake to do all that may be necessary in order that such transfer be effected'.
• Mintoff then threatens the removal of limited liability to cover deposit withdrawals.
• Mintoff then threatens  further to remove Lm4,000,000 of public finances held in The National Bank of Malta unless the shares were signed over.
• Panic stricken that they would not only be losing the bank but also their homes in the process, some shareholders started to rally the troops to collect the much-needed signatures.
• These shareholders fail however to get the 65% majority of shares required to pass the extraordinary resolution.
• On Wednesday 12 December 1973 at 2.00am, the Directors were informed that the bank would be taken over by government by virtue of section 18 of the Banking Act and that the Bank's license would be suspended, and that Lino Spiteri had been appointed to take charge of the assets of the National Bank of Malta.
• Act VLX 1973 was passed and the board of Directors were removed by government although the 65% majority share transfer was never ever collected.
• In March of 1974, the government then invests Lm3,000,000 and in the new enterprise now known as the Bank of Valletta with an authorised share capital of 6,000,000 split between the government of Malta and the Malta Development corporation on a 60/40 basis.
In the aftermath of this unprecedented abuse of public power in the alleged name of the national interest, the ousted directors of the National Bank of Malta sent a letter to their shareholders explaining the events that led to their demise and explained that while it was the shareholders' individual choice whether to transfer the shares or not for no value whatsoever over to the government, that as bankers they felt compelled to protect the interests of all the Maltese depositors and the customers of the bank and that they acted in all their capacity to avoid the suspension of the bank's activities and to give full assurance to the depositors in the interests of Malta and our fragile economy. 
I am certain, that everybody with a logical mind can differentiate between what I am saying and what Lino Spiteri is implying. Merely saying that the General Manager of the National Bank told the prime minister "take it, take it", is simplistic and ridiculous at best. How can anyone, really write and expect to be credible when saying that a banking group established since 1946 after having amalgamated with Scicluna's Bank to form the most consolidated group of Maltese capital and only three years before having  incorporated the business of B.Tagliaferro and Sons (at the time Malta's largest property holder) and after having its most successful years to date (1972-1973), make himself believe that the Prime Minister at the time only took it over for free because the manager begged him to do so.
Nobody, in his or her right mind, would have ever given up their shares for free unless there was the very real threat that he would lose much more by keeping them. The threat of the removal of the limited liability was the abuse of power of the then Prime Minister who acted maliciously, only to be aided and abetted by his parasitical henchmen.  


Given the threat, some shareholders yielded, however can you really blame them as not only would they have lost their bank but probably their homes and personal effects in the process too. The ones that did not were then punished in other ways.  In the same letter, the Board of Directors explained how they expected the relevant figures on the balance sheet to come forward, whereby they could then properly assess their value after the events that let to the run. 

This information was later produced, however, and in the most simplistic way possible, the auditors appointed by the council of administration for the purpose reported that the erosion of the capital of the National Bank, took place due to an arbitrary 300% increase in the provision for the bank's bad and doubtful debts, on the basis that the bank was too heavily exposed to the property market and as a result the bank was worthless as it had invested too much in Maltese property. Incredible but true, and despicable, to say the least.

"The third factor concerns legal actions taken by former shareholders of the National Bank"

In his final point, Spiteri comments now, not on the realities of the events but on the court cases that followed. He says it is a shame that the case has not been settled, yet not because he has any moral responsibility towards the rule of law but only to throw a punch at the Nationalist administration that after having championed the cause of the expropriated victims to gain political mileage, they have been left out in the cold by the ones the shareholders had looked to for assistance.  That I can actually find myself agreeing with Spiteri on this point, only adds further to the insult and injury. That the Nationalist party, like Pontious Pilate, makes this seem like a Malta Labour Party affair is another lie. In fact, the shame of Dom Mintoff and his government is now no greater to that of the Nationalists, as both have profited from it in the name of the Republic. Just a few years ago, when the Bank of Valletta was supposed to be privatised, were tentative offers of potential out of court settlements underhandedly put to the shareholders through certain entities... while however refusing to make it official in case the deal did not go through and potentially exposed to admitting that compensation was due.

Growing up, I have lived in Malta and around the hypocrisy that this story exposes. The Mintoffian administration took the asset on the basis of a lie, while the subsequent Nationalist administrations stand back and idly take advantage of the situation on two counts. For one, they accuse the Labour party of abuse and foul play... while on the other hand they make hay out of the financial benefits that the foul deed brought to government coffers.  

On this note I have only one thing left to say. Irrespective of the evidence collected and the eventual verdict, the National Bank of Malta, founded by my great-grandfather, was stolen. Both sides of the Republic applauded, and the rehashed Bank Of Valletta is now their proudest boast. The Republic grows, and the Bank of Valletta with it, yet the shame of these events are engraved in our country's history.

And on this note, I will leave Lino Spiteri and any others with this very real challenge. Bring anyone from any political camp or creed and let us debate the issue. The National Bank of Malta was stolen and still languishes in the Maltese courts without a verdict 38 years later. Therefore, the challenge goes out again, anytime or any place that lets the truth come to light. Only he who has things to hide operates under darkness.

Jeremy Cassar Torregiani is a shareholder and a grandson of the Central Bank's founder.


Black night in bank history (1)

I refer to the article National Bank Group Saga featured in The Times Business Supplement of April 26 and to various other articles regarding the same matter appearing in The Times. I would like to state the true facts which concerned our family on that fateful December night of 1973 when my uncle, Peter Dacoutros, was forced to sign off his shares in the National Bank of Malta.

Two policemen in uniform turned up at the door of my uncle’s residence in East Street, Valletta, and rang the doorbell at 10.40 p.m. My uncle went downstairs in his pyjamas and opened the door accompanied by his two terrified spinster sisters who lived with him. The three of them were in their late 70s at the time.

One of the two policemen handed a document to my uncle and requested him to sign it. My uncle asked what the paper was all about and in return the policeman told him it was a document whereby he would be signing off his shares in the National Bank of Malta. My uncle had a quick look at the document and then told the policemen that as his brother, who happened to be my father, was a lawyer, he would consult with him immediately and the following morning he would go to the bank’s head office and see to the matter.

One of the policemen told my uncle: “Jekk inti ma’tiffirmax dik il-karta issa, għada filgħodu ma jkollokx għalfejn tmur il-fabbrika għaliex ma tkunx tiegħek iżjed.” (If you do not sign that document now, tomorrow morning you will have no reason to go to the factory as it will not be yours anymore).

My uncle Peter signed the document. Yes, signed under duress or as we commonly say, at gunpoint!

Nobody in his right frame of mind would sign off his wealth unless he was forced to do so. I was a 22 year old man at the time. These facts are as clear in my mind as they were on the night it happened. Yes, because these facts are the undeniable truth. These facts I recounted in court when I was asked to give testimony on October 28, 2010. A distortion of these facts by anybody directly or indirectly involved in engineering the takeover of The National Bank of Malta would be acting like the proverbial “throwing the stone and then hiding his hand”. It would be a devious mind acting out of shame and guilt for one’s wrongdoing. Where there is guilt there is crime.

Yes, the takeover of The National Bank of Malta was a heinous crime, an ongoing cancerous tumour in the banking system of our Malta.


Black night in bank history (2)

I refer to Lino Spiteri’s article National Bank Of Malta Saga in The Times’ Business (April 26).

Mr Spiteri is correct in saying that surviving shareholders are irked by the fact that 38 years after the event the court cases have not yet been concluded. However, his declaration that the only “individuals who went to plead with shareholders to hand over their shares to the government were members of the bank employees’ union, hugely concerned about their job” is incorrect.

“Bully boy” tactics also took the form of psychological bullying. The “bully boys” who “banged on my door” took the form of policemen who woke up my whole family in the dead of night with the heavy-handed ringing of our doorbell.

They said they wanted to search the house but after telling my late husband and I to ensure that we signed over our personal and family company shares in the National Bank Group as demanded by Dom Mintoff, they left without a search. The threatening words “or else” were left unspoken, but we got the message

sage! I also recall that during those terrible days which left a scar on Malta’s banking history, our telephone calls were being monitored. Yes, we definitely felt threatened by Mr. Mintoff’s direct and veiled threats. Who in their right mind would have signed over their shares without compensation unless they felt threatened by moral violence and possibly also physical violence?


A comment on one of the links above:
Astrid Vella
May 5th, 13:43

I do not if it was Peter's aunt, but I do remember that one old lady died very shortly after this event. Her demise was attributed to the stress of that fateful week and the worry about the life of penury she was facing in her old age, having been brought to the point of having to sell her furniture in order to survive.

joanne pace

May 6th, 18:24
The lady whom you are referring to was Angelika Colombos who died of a heart attack in Archbishop Street Valletta on the morning of the takeover of the Bank while she was on her way to the Head Office of the National Bank to see for herself the run on the Bank. She and her sister Maria Colombos had signed off their shares the previous night. Maria Colombos eventually died at Mount Carmel Hospital penniless.


Reflections after watching Dear Dom

With all the comments and opinions being aired about the film Dear Dom, I decided to go and see it with my wife and a friend. I found it very interesting especially with regard to Malta’s dire need to diversify after the closure of the British base and the political tactics used to extract the maximum rent from Nato.

Whether the tactics used in these negotiations helped or hindered future foreign investment in Malta is a matter historians will debate endlessly, but what is not in doubt is that it put Malta more clearly on the map as an independent entity in the eyes of the overseas world.

Someone who also spent her life trying to raise Malta’s awareness on the world map was my great aunt Mabel Strickland who, as readers well know, was the editor and then proprietor of The Times for over 50 years. In 1935 she had founded The Times in conjunction with her father Lord Strickland who was half-Maltese. Lord Strickland was an ex-Prime Minister of Malta following the 1926 compact with the Labour Party. He was also uniquely a member of the British parliament and an ex-colonial governor.

You can imagine therefore that my own interest in Dear Dom was a very personal one. Dom Mintoff had a turbulent relationship with the press in general and more particularly with my aunt. Unlike some, Mabel was never afraid to stand up and speak out if she disagreed with government policy as she often did with governments of all political persuasions. I have heard that Mr Mintoff admired Mabel but, like most politicians, he was never best pleased when criticised.

The film, unfortunately, gave only a passing reference to Black Monday (in October 1979) when thugs attacked and set fire to The Times at Strickland House while being watched, but surprisingly not stopped, by the police. This was a significant and very regrettable event in Maltese history along with other dreadful incidents on that day.

In the previous few years, behind the scenes there were a number of other less well known decisions made by the government at the time which greatly impacted Mabel’s life and inevitably mine as well. These particular decisions were taken in 1977 and 1978 and undoubtedly affected my aunt – yet by association, their effect impacted my life in a serious and wholly detrimental way.

Mabel never married but decided in 1975 to make me her sole and universal heir so as to pass down, through the Strickland family, the assets and business interests she had inherited from her father (my great grandfather) or that she had built up during her lifetime. Mabel had not changed her will since 1940 (in the heat of the Second World War) and before changing her will in 1975 she had discussed her decision at length with trusted friends before informing me of her very carefully considered decision. In 1975 Mabel was 76 and I was a mere fledgling of 21.

Many of our childhood holidays were spent staying at Mabel’s villa in Malta where we had such fun. My aunt had got to know me even better between 1972 and 1975 when she used to visit me in London where I was training to be a chartered accountant. We got on really well and I loved her sense of humour.

In planning her succession she later told me she had purposely chosen the senior branch of the family to inherit her estate specifically to continue the connection between the Strickland family name and her business and property interests.

Mindful of the fact that my elder brother would one day have responsibilities in the UK, she chose me to be her successor hoping that I would come to live, work and possibly marry in Malta. She believed I had the interest and the training to maintain the independence and success of the press and she was adamant I should not become what she called an absentee landlord. She also asked me to continue her lifelong work and legacy in furthering good relations between Malta, the UK and Europe.

However, government policy in Malta in 1975 did not allow foreign ownership of local companies and this was later enacted in the Foreign Interference Act. Perhaps unsurprisingly, in the years leading up to the final closure of the British base, Mr Mintoff wanted Malta for the Maltese and did not want Maltese jobs to be dependent on non-Maltese entities and the media companies were a primary target for him. This was of particular concern to Mabel since, although she herself held a Maltese passport, I was only part Maltese and held a UK passport.

Foreseeing this problem, my aunt had set up a trust as part of her 1975 will in order to hold the majority shareholding in The Times from the date of her death until such time as I was able to achieve Maltese nationality. When this happened, it was proposed that the trust would pass the shareholding over to me before being wound up. This was a straightforward procedure that many families have adopted in the UK to safeguard assets and protect the jobs of their employees. Although the trust at that time was ultimately for the benefit of her heir, it had strictly charitable objectives during its lifetime and was to be overseen by independent Maltese trustees.

Making even firmer plans, Mabel also decided to adopt me with the full consent of my parents and myself. This adoption was initially passed by the courts in January 1977 just after I arrived to live permanently in Malta. However, very surprisingly, the government of the day caused this application to be blocked before it could be ratified by the courts introducing retrospective legislation most of which still stands today stopping anyone other than a minor being adopted and stopping the automatic right of an adoptee getting nationality.

Bizarrely it also stopped any woman over 60 from adopting – yet a man, of course, could still father a child who would certainly get Maltese nationality. This was a major setback for Mabel, but in her typical manner she then joked that if she could not adopt me then she would ‘marry’ me instead. Even though this was said in jest, the government of the day changed the law and constitution of the country to render such a marriage null and void with regard to nationality qualifications.

As if all of this were not enough, in January 1978 the government of the day decided to ban me from Malta and neither Mabel nor I were ever provided with any explanation for this draconian action, leaving me with no option but to assume that it was done merely to intimidate my aunt.

We only became aware of this ban when I subsequently left Malta to represent my aunt at a newspaper conference in Australia. At this conference I made a speech de­fending the necessity for the freedom of the presses and criticising recent abuses of those freedoms in Malta. On returning from this conference, at the end of March 1978, I was detained at the airport and deported back to the UK. This decision by Mr Mintoff caused Mabel to become very ill and resulted in my having to stay away from Malta for nine long years.

During these nine years Mabel and I had to correspond by hand delivered letters since she believed her post to be intercepted and her telephone calls to be tapped, such was the reign of fear at the time. My aunt sadly remained ill for much of this time, particularly after the Black Monday incident in 1979 when she nearly died.

To my surprise, in 1979, some two months before Black Monday, Mabel was seemingly persuaded to change her will again. Her legal adviser, by his own admission, helped her with drafting the new will to put it into a legal format and dictated it to her for her to write in her own hand. It was filed with a revised trust (now known as the Strickland Foundation) in August 1979 but, although still her heir, I was not shown the changed will despite my aunt instructing her legal adviser to see me in London the following month.

Despite coming to London at this time, her legal adviser did not come to see me or explain anything to me. Furthermore, I was never given a copy of this 1979 will despite having always been given copies of her earlier wills since I became her heir. Indeed I only became aware of the revised will after Mabel died in late 1988 just short of her 90th birthday and only 18 months after I was finally allowed to return to Malta. Had I known about the changed will I would certainly have asked her about it to ensure that it accurately represented her final wishes.

The Strickland Foundation’s intended objectives, as set out by Mabel, were: (1) to foster the national interest of Malta and in particular to promote in Malta democratic principles, the observance of human rights and the exercise of a free press; (2) to uphold the European character of Malta and support Malta’s continued presence in the Commonwealth; (3) to finance scholarships and other activities for the attainment or furtherance of any of the objects mentioned in this article; (4) to assist in such manner as may be advisable within the means available persons who are or were employees of Allied Newspapers Limited and their member families; (5) to help improve the standard of Maltese journalism and the preservation of its freedom and its independence; (6) to direct, administer and manage the assets of the foundation of the council of administration for promoting the above objects and such other objects as are incidental or conducive to the attainment of the above objects or any of them.

Although Mr Mintoff could never have predicted all the consequences of his actions in this case, the legacy of these decisions continues to haunt me. My ‘legacy’ from Mr Mintoff has therefore been bittersweet so much so that I recently had a meeting with him to try to understand his reasoning and reach some measure of closure on this chapter of the story.

From watching the film Dear Dom, I can believe that even if Mr Mintoff’s underlying motives were good, then his methods of implementing his policies were certainly not fully considered. Of course it is always easy to say these things with the benefit of hindsight but, at the time, one has to use whatever means are available which may be far from ideal. Surely the important point is to treat everybody with the respect that each of us deserves and in accordance with our Christian traditions.

We are now accustomed to seeing allegations of corruption and mismanagement bandied around in the Maltese papers, frequently relating to the award of contracts and permits or suggestions of improper influence being applied to some politicians, judges and businessmen. These were common accusations in the time of the Mintoff governments but sadly they are becoming increasingly frequent again suggesting that the problem is not limited to one political party or business interest and not even only in Malta. The modern view of morality sometimes seems to be that greed is good so long as you get away with it – the Christian idea of helping each other seems to be under strain although I was very impressed in recent weeks to see so many in the parishes in Malta working together to make the Easter celebrations a truly meaningful and spiritual celebration for all.

As regards my own situation, I am not happy with the way my aunt’s two executors carried out their fiduciary duties over the past 20 years. They were executors of my aunt’s estate as well as being, at the same time, the representatives of the principal legatee which is the Strickland Foundation. Yet Mabel’s chosen heir is neither on the board of the newspaper group nor on the council of the Strickland Foundation which is the controlling shareholder of The Times. Instead, the board of trustees, on which the two executors have sat, appointed the two sons of the executors onto the council of the Strickland Foundation, despite no Strickland being represented there.

The end result is that the two extraneous families of my aunt’s executors now sit on the council of the foundation, which administers her legacy, while her carefully chosen heir has been continually excluded from both organisations by the majority shareholder with no explanation to date.

Furthermore, it would seem that Mabel’s home and the majority of her family’s sentimental possessions now belong to the same Strickland Foundation and although the heir has the rights of use and habitation for his lifetime, his family’s life has been made difficult by the self same people who were originally chosen to protect his interests when exercising their fiduciary duties.

Other assets, which I understand should have been passed to me, including my aunt’s personal papers, have been withheld from me and I have had to take legal action to try to recover them with the consequent waste of many years before justice is hopefully achieved. We all know the old saying that ‘justice delayed is justice denied’.

I have therefore, partly by dint of Mr Mintoff’s government policies, and partly by the actions of third parties, lost most of my inheritance originally intended to ensure the continuance of the Strickland family and the Mabel Strickland legacy in Malta and, like the National Bank of Malta’s shareholders and many others in the Dear Dom film have, in effect, become yet another statistic of the Mintoffian aftermath.

I wonder if Mr Mintoff could ever have envisaged this outcome



Justice over National Bank (1)

In his comments (National Bank Group Saga, April 26) Lino Spiteri asserted that only National Bank of Malta (NBM) employees were involved in bullying individual shareholders to sign over their NBM shares to government way back in 1973. In his letter National Bank Scandal (May 10) George Sclivagnotis relates his own experience and states that, in his case, he had given in to the pleas of a friend of his, a NMB employee. However, he did say that it was known at the time that both police and bank employees were involved in hassling NBM shareholders to give up their shares.

Thus, I cannot see how one can categorically state that the police (aided by thugs?) were not involved in threatening NBM shareholders with dire consequences if they did not immediately transfer their shares to government. Indeed, it was no secret that even Malta’s Ambassador to Italy at the time was involved in seeking the signatures, by personally calling at their Rome addresses, of members of Marquis Scicluna’s family who had substantial equity interests in the NBM.

The object of this letter is not to enter into the merits of whether or not NBM employees were the only persons involved in chasing shareholders to give up their shares nearly 40 years ago. This notwithstanding that I was already then a senior official in Barclays Bank and have a good recollection of the uneasiness that Malta’s entire banking system went through in those dark days.

The passage of time is unlikely to place any judge presiding over the long-outstanding court cases in a position where he/she can have the real feel of what exactly prompted the run on the NBM in 1973 and thus dispense justice in a case that has been passed on from one judge to the other over the years.

My proposal is that it is time the government took the bull by the horns and made a real effort to have this matter settled out of court assuming that the Association of NBM shareholders (as plaintiffs in the outstanding court cases) are ready to accept a reasonable settlement.

According to Bank of Valletta’s annual report and financial statements as at September 30, 2011 the government owns 25.23 per cent of the equity and a further 0.48 per cent is held by Malta Government Investments Ltd (a fully government-owned entity). Thus the government’s investment in BoV can be said to be worth nearly €131 million at the current market price of €2.12 per share

My calculations are based on the fact that the government holds 61,704,000 of the 240 million shares in issue.

Some years back it was stated in the media that the government and the Association of NBM shareholders had attempted to strike an out-of-court settlement but this foundered because the latter’s demands exceeded the amount that government had offered. I do not recollect the exact figures mentioned in the media but I believe that the difference was not so astronomical as to prevent another effort from being made at an amicable settlement.

More so bearing in mind that the current worth of the government’s BoV shareholding at nearly €131 million must be way above whatever figure the government may have deemed fit to offer some years back.

So why does not the government dispose of part of this – even the entire – shareholding and finally wipe the slate clean on this blot on Malta’s banking history by reaching an out of court settlement with the aggrieved ex-NBM shareholders and their heirs?

Admittedly, the government would thereby be giving up its share (say, €8 million per annum) of BoV’s annual dividend. But then the surplus between €131 million and whatever amount the Association of NBM shareholders should be prepared to accept is bound to be a welcome addition to the government’s coffers!

With goodwill on both sides justice can finally be done and the courts would be released from having to dispense justice on something that happened nearly 40 years ago.

One comment :


National Tuesday 15 May 2012 - 09:00

National Bank of Malta revisited | A Republic built on injustice?

In the first part of MaltaToday’s revisiting of the National Bank of Malta saga, MaltaToday expands on the wider implications of an injustice upon which the foundation stone of the Republic was originally laid

Raphael Vassallo

The saga of the National Bank of Malta has been associated with the maxim 'justice delayed is justice denied' for so long now, that the words no longer seem to have any impact.

What few pause to consider, though, is that it is not necessarily just the original shareholders who can claim to be 'victims' of the bank's forced take-over in 1974.

There is a sense in which the wider population as a whole can also be termed a 'victim': having been forced to acknowledge that the country they call home is one in which the rule of law - on which the very principles of democracy are supposedly rooted - can be suspended with impunity at the mere whim of the government of the day... with little or no prospect of justice ever being meted in future, regardless how many times the administration of government may change in the background.

The people of Malta can also claim to have been 'robbed' on another level, too: robbed of their piece of mind that justice is indeed blind and equitable to all parties, irrespective of third-party interests. 

With legal action on this issue having been diverted into a judicial limbo for over 35 years, the National Bank of Malta saga continues to emphatically illustrate how the local justice system can, on occasion, simply fail to deliver any justice at all.... especially in cases where (coincidentally, no doubt) the government of the day may have a clear vested interest in avoiding closure.

Incredibly, almost four decades after a profitable and financially solid private bank was nationalised on the basis of its presumed 'insolvency' - following an exercise in creative accounting which somehow managed to nullify virtually all the capital of the same bank's private investors - surviving National Bank of Malta shareholders and their heirs are still battling for their rights in three court-cases: the earliest filed by Peter Cassar Torregiani in September 1977; the other two by Vincent Curmi and Philip Attard Montalto, both in September 1992.

In a bid to 'speed up' proceedings, the three cases have since been amalgamated into one. But the resulting acceleration of proceedings was not very noticeable.

Indeed it seems the machine of Maltese justice has meanwhile come to a complete standstill. On April 23 of this year, Mr Justice Joseph R. Micallef (who presides over all three cases) once again deferred the final session, this time to September 27.

As previous sessions of all three cases had similarly ended in deferments, individual shareholders were heard voicing their suspicions that there was more than mere legal bureaucracy and inefficiency at work behind an astounding four-decade delay.

On paper at least, the government has traditionally always shared their exasperation. In December 2008, Finance Minister Tonio Fenech assured parliament that "the government had every interest in the cases being decided without delay" and "without any more time wasted on procedures".

And yet, if a future ruling goes against government, not only would the resulting compensation have to be paid out of the government's coffers... but Malta's only locally owned bank - the Bank of Valletta, to which NBM's seized assets had been transferred in 1973 - would effectively have been confirmed as the offspring of a state-sponsored act of theft.

Evidence that something is indeed rotten at the very heart of Malta's financial system was separately forthcoming in 2009, when a corporate history of BOV - commissioned by the bank itself - was mysteriously withheld for publication.

Historian Henry Frendo had been commissioned to write the 200-year history of the illustrious bank from its inception as the 'Anglo Maltese Bank' in 1809 all the way down to the present; but though the book was duly completed, it has yet to see the light of day... ostensibly, for fear of "influencing ongoing court proceedings".

According to legal advice given to BOV at the time, some of the claims reportedly made in interviews with former shareholders could be interpreted as having a direct bearing on the ongoing case. Either way, even just by drawing attention to these claims, the book would in a sense achieve the opposite result of that intended: casting further doubt on the 'official' version of the Bank Of Valletta's murky origins. 

Similar concerns had already derailed plans to fully privatise BOV in recent years, when - after a last-minute judicial protest had been filed by NBM shareholders, literally at the eleventh hour before the case became time-barred - the bank apparently failed to satisfy due diligence criteria.

Viewed from this perspective, the ongoing battle of the National Bank of Malta can be seen to transcend its declared aims of 'justice for shareholders' alone. For apart from the right to fair compensation for their expropriated assets, the plaintiffs are also demanding an official acknowledgement that what happened to the National Bank of Malta in 1973 was, in effect, a grave injustice perpetrated by the State - quite possibly, an injustice upon which the entire edifice of the Republic of Malta was subsequently built.

Failure to redress this injustice, they argue, will only further compound an existing impression that the rule of law, in this country, can simply be subverted at will.

Even without this disquieting impression, the implications of a court ruling in the shareholders' favour would separately raise serious, far-reaching questions concerning some of Malta's most profitable private companies, which were initially financed through NBM loans.

Not only have some of these companies proved immensely successful since their inception in the early 1970s; but their success in some cases parallels the success of the Maltese economy as a whole.

Examples include former and present tourism lynchpins such as the Corinthia Group of Companies and the Preluna Hotel.

Ironically, the selfsame loans that permitted the initial launch of these enterprises were themselves cited as evidence of the bank's 'insolvency' in 1973.

When setting up the Council of Administration  to oversee the bank's operations, Mintoff's government had cited a specially-commissioned property index which determined that the value of property in Malta had fallen by 40%. As a result, the provision of bad and doubtful debts arbitrarily increased by 300%, to effectively erode the bank's capital base.

Years later, the courts would appoint an auditing firm KPMG to investigate the status of a number of 'questionable' NBM loans dating back 1973. KPMG duly discovered that the vast majority of supposed 'bad debts' had in fact been repaid in full; and perhaps more significantly still, other loans dating back to this period returned the enigmatic answer: 'file not found'.

Such wildly contradictory findings were consistent with similar contrasts between the NBM's supposedly precarious state in 1973, and the fact that its reincarnation as BOV got off to a financially impressive start the following year: registering a pre-tax profit of LM400,000 in its first eight months of operations.

Tellingly, the exact same figure had earlier been predicted by the National Bank Group in its financial forecast for the same period.

These considerations alone may justify serious doubts as to the real cause of what appears to be an endemic reluctance to allow this case to run its full course.

They may also help explain the curious political contradiction, whereby an injustice allegedly perpetrated by a former Labour administration under Dom Mintoff, would be sustained and in a sense compounded by every administration of government since: including successive Nationalist governments led by Eddie Fenech Adami between 1987 and 1996: when, despite earlier promises of 'justice', the government not only failed to restore the National Bank of Malta to its previous proprietors (or at least, compensate them for their loss); but it also sold its own majority shareholding to the general public... thus effectively placing out of reach any hope of final reparation.

Comment posted by: maltipuro — 15/05/2012 12:12:48
The bank actually made Lm1,104,000 profit in the first 8 months of operation from March 1974. There was even a DIVIDEND of Lm270,000 handed out at 4c5 a share. This all according to the BOV Accounts 1974, there was even the introduction thar resembled a political manifesto, with a 9 year plan to 1979, where the introduction of 20,600 new jobs would be created, acceleration of the Industrial society, earning foreign exchange through volume exports, bulk buying and ad earnings from manufacturing, ship building and from the agricultural sectors. They even had the audacity to claim and I quote: “This excellent performance has been achieved by a careful reorganization of the assets acquired from the national bank of Malta Group in order to maximize the earning potential….”. So going back to the profit and dividend, the accounts register a profit after tax of Lm686,0000 and recommended gross dividend of Lm432,000 leaving a reserve of Lm416,000 to the bank. Now please tell me, which company or bank ever made a pure profit and gave out a dividend of almost 50% of its profits in the first 8 months of operation. In another article, and I quote: “Your board of Directors (Danny Cremona was Chairman) is confident that the present rate of profitability of the bank will be maintained and earning will continue on a rising trend corresponding with the flow of deposits from customers and as the volume of business expands”. Does that sound like a bank that was in trouble or needed help, it’s all in black and white and has and always will remain a case of daylight robbery on a grand scale.


Posted by: NVella — 15/05/2012 12:23:53
"Lost files" - pray do tell more...... How easy it is to become wealthy at another's expense. If the seizure of the bank resulted in some not paying back their loans, every effort should be made to recover these at current day value. Talk about unjustified enrichment. The hardest part of building a business is always the beginning when you have nothing. So if these businesses were built on the back of loans from the National Bank, these companies should be made to compensate the former shareholders of National Bank. This would be more equitable than making the Maltese taxpayer pay.


Posted by: NVella — 15/05/2012 13:05:26
So that makes Mintoff a robber - no more no less. No Robin Hood this one. For all the claims that he did what he did for the poor, the reality is that he wanted to control the country by deciding who was to become rich.




Row over bid to drop National Bank case

Meeting of shareholders set

The government has tried to drop the 35-year-old court case involving National Bank shareholders by claiming it is time-barred, sparking outrage from those who expected a Nationalist administration to deliver justice, The Sunday Times has learnt.

“The government’s procrastination is turning it into an accomplice, a partner in crime, with the Mintoff government it so constantly and consistently vilifies,” said Milica Micovic, a director of family business B. Tagliaferro and Sons, the largest corporate shareholder of the former bank.

She is one of many shareholders still fighting for compensation over the savings and investments they lost when Dom Mintoff’s Labour government took over the National Bank of Malta and set up the Bank of Valletta in the early 1970s.

The shareholders will be meeting later this month to discuss what further action to take and galvanise a unified position in their battle for compensation.

A plea filed in 2010 by the Attorney General’s office, on behalf of the Prime Minister and the Finance Minister, argued the main court case was time-barred when it was filed in 1977.

The government quoted articles in the Civil Code stating that to rescind a contract on grounds such as violence, error or fraud, a case must be filed within two years. In instances of violence, this period ends two years after the violence ceases.

The main civil case was filed four years after the National Bank of Malta was taken over by Mr Mintoff’s government.

Two other constitutional cases were filed in 1992 and later amalgamated into the original one. Shareholders must therefore prove in court that the violence and pressure they endured to sign over their shares for nothing in 1973 continued for years.

The National Bank saga has long been synonymous with court delays – several judges have presided over it – but interest was revived recently by Pierre Ellul’s documentary Dear Dom, which interviewed some of the victims.

This is the first time the government’s plea, which was filed two years ago, has been reported.

Shareholders have been awaiting judgment since November 2010 but sentencing was put off seven times in the past two years, and is now expected on September 27.

But shareholders who have kept relatively quiet throughout the long saga are now breaking their silence to condemn successive governments for their handling of the issue.

“Why should I have any belief in Maltese justice? The PN was elected to deliver justice and values but it has betrayed its moral high ground and its moral mandate,” Ms Micovic said.

Her uncle was the custodian of the keys to the Tagliaferro bank, which had been bought by the National Bank, becoming a subsidiary company.

She was 27 when soldiers and policemen – not bank employees or shareholders – went to her uncle’s home at 3 a.m. to warn that if he did not hand over the bank’s keys, they would arrest him.

“I want to put the facts straight,” she said, pointing out that former Labour minister Lino Spiteri, the Central Bank’s head of research at the time, claimed Mr Mintoff had been begged to take over the bank following the run by worried customers desperate to retrieve their money.

“This is blatantly untrue,” she said.

Mr Spiteri’s comments attracted ire from many of the 300 shareholders who were involved in the saga, several of whom inundated The Times’ letter pages in past weeks.

Ms Micovic, 65, said the government’s “time-barred” plea in June 2010 was filed while negotiations were under way to reach an out-of-court settlement.

She pointed out that in 2008, Finance Minister Tonio Fenech told Parliament the government had every interest in the cases being decided without delay and “without any more time wasted on procedures”.

But the court case proved the opposite.

“It’s a political issue,” she said. “Pre-1987 we were promised by future Nationalist ministers and MPs that justice would be served. But as soon as they were elected, they washed their hands of us.

“[Former Prime Minister] Eddie Fenech Adami simply told us to continue with the court cases.”

She said the government should have settled with the shareholders as promised, while the economy was going strong.

“Back then compensation would have been a drop in the ocean,” she said, adding the government acted greedily. “Labour plundered and successive Nationalist governments continue to enjoy the plunder”.

One reason the government did not want to settle was because it was still clinging to the handsome dividends from its shares in Bank of Valletta, set up by Mr Mintoff in 1974 by taking over National Bank’s assets, she added.

However, even now that the economy was weaker, the government could find the money, just as it did to finance the new Parliament building or pay compensation to bus drivers.

“This is a government of double standards,” she said. “This is a travesty of justice and the government should hang its head in shame.”

What irked her most was that while in court the government argued there was no violence, pressure or psychological bullying on shareholders to sign over their shares, in public it harped on about the violence committed by the Mintoff government.

Part of the hurt in having a case prolonged so much was that many who lived through the period were now dead. The government’s plea aggravated this.

“It seems to be the general perception that there were only a few large shareholders, when in fact there were many small ones; small businesses, widows and pensioners, many of whom lost their pensions, life savings and businesses.

“If the shares were being voluntarily offered, there would have been no need for threats and for policemen to be sent behind our doors late at night and in the early hours of the morning.”

The Central Bank, which should have been the lender of last resort, failed to do its job under the “express instructions” of Mr Mintoff, who said he had no interest in saving the shareholders.

This was a time when Malta was going through a transition from small, family-owned private banks to the beginning of bank regulation, Ms Micovic said.

At the time, her mother was a shareholder in B. Tagliaferro and Sons Ltd, as were her two brothers and their cousin.

She confirmed the company had a corporate loan in 1973 that had been fully honoured with interest, despite several official threats – by the Mintoff government – to call in the loan and unsuccessful attempts to take over the company.

For almost 40 years the government enjoyed “many millions” in dividends from their shareholding in the BoV, with many more millions from selling shares, Ms Micovic said.

Although the shareholders have refused to make their demands public, they said their expectations are “modest”, considering the €58 million paid to drivers to take old buses off the road.

“The truth is that justice has been denied and continues to be denied to all the shareholders of the National Bank of Malta.”


‘Government should let the courts decide Bank case’ - PL

The Labour Party believes the government should abandon its fresh plea to drop the National Bank court case, which has dragged on for more than 35 years.

“We are sceptical of such a move and think this is a technical point that was raised too late in the day. It would be better for this plea to be dropped so the courts can reach an independent decision,” a Labour spokesman said.

The Attorney General’s plea, filed in 2010, was only revealed in the last edition of The Sunday Times in an interview with a representative of the largest corporate shareholder of the National Bank of Malta, B. Tagliaferro and Sons.

Milica Micovic, a director of the Tagliaferro family business, accused the Nationalist government of being an “accomplice” with the Dom Mintoff regime whom she accused of short-changing her family and about 300 other shareholders.

The case goes back to 1973 when, after an unexplained run on the bank, shareholders were allegedly coerced to hand over their shares for nothing to Mr Mintoff’s Labour government, who later replaced the National Bank with Bank of Valletta.

The government’s plea, filed on behalf of the Prime Minister and the Finance Minister, claims that the court case that started in 1977 was “time-barred” because it was filed after the allowed two-year time window.

The move has sparked outrage among former shareholders who have long expected Nationalist administrations to fulfil their promise to deliver justice.

The government has not answered questions about the plea, saying only that while the government took note of the strong feelings of the shareholders and their heirs, “no minister could usurp the function of the courts”.

“The courts have been asked, by the shareholders themselves, to rule on various aspects of the National Bank issue and the government will adhere to the court’s judgement,” a Finance Ministry spokesman said.

“Since the various cases filed by the shareholders are pending and the courts now have to deliver judgement, it is imprudent to comment further.”

Former Nationalist Party president Frank Portelli lambasted the government’s plea to drop the case, saying the PN had a “moral obligation” to see justice was done or else face the consequences.

“The government is giving the impression that it is trying to avoid awarding compensation on a technicality, which is manifestly wrong. The government must act as the ideal father. Even if it can drop the case on legal grounds, it will have no moral basis. We are not talking about legalities here, we are talking about justice,” he said.

“This is all the more so when there are so many political ramifications stemming from the past when the PN was in opposition.”

He said it would be best for the government to appoint some negotiators to come up with a fair out-of-court settlement and present convincing workings to the shareholders.

The government, as the majority shareholder, should have also intervened in the Bank of Valletta La Valette Fund case in which about 2,000 families lost their savings after joining a fund meant for professional investors.

Nationalist MP Robert Arrigo felt the National Bank saga was a “complex and complicated” issue and negotiations could only be finalised once the shareholders emerged with a united stand. As the Finance Minister’s parliamentary assistant, he was tasked with broaching an out-of-court agreement between both sides in 2010.

He said the government was willing to “meet, listen and find a solution” but there was never a common front presented by the shareholders. In his experience, he said, the government acted in good faith.

The shareholders will be meeting this month to come up with a unified stand in the hope that a deal could be struck.

Meanwhile, Labour has steered clear of committing to an out-of-court settlement if elected to government.

“A new government would let justice take its course and respect a final decision taken by the courts,” the spokesman said.

President Emeritus Eddie Fenech Adami, who was elected Prime Minister in 1987 on a slogan of Work, Justice and Liberty, was also contacted about the matter.

Back then, according to Ms Micovic, future Nationalist MPs and ministers had assured her family and other shareholders that justice would be done if the PN was elected.

Dr Fenech Adami said his government never took “sides” and, once elected, decided to adhere to the normal justice process, seeing the cases had already been filed.

“What is unfortunate is that it is never-ending,” he said when asked whether the government’s fresh plea fitted into this view of letting the cases go ahead.

Asked if the government should seek an out-of-court settlement, he said this would be “pretty difficult”.

Shareholders have been awaiting judgement since November 2010 but sentencing was put off seven times over the past two years and is now expected on September 27.

Comments : Corinne Vella

@michael catania

Here are a couple of documents that could help you reach a better informed conclusion:

NBM 1972 annual report

Bank of Valletta 1974 annual report (1st years of operation after taking over NBM)

Corinne Vella

@ M Grima

Banks do not ‘lose everything or else make a windfall profit’ and ‘many businesses’ couldn’t have ‘gone bankrupt, similar to what would have happened to the bank’. A lot happens between the two extremes of bankruptcy and windfall profits, and the businesses that were financed by the National bank were not banks themselves, and

Here’s a potted history of the turn of events:

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