In a strange and unprecedented move that indicates a state of panic among the bank's top brass following stories leaked to this newsroom, around 50 bank managers have been informed by BOV's CEO that: "With immediate effect any requests for information coming from members of the Board of Directors, other than personal queries, should only be given if these requests come from the Company Secretary's Office," The Malta Independent on Sunday can reveal.
Sources within the bank who spoke to this newsroom said that following details that emerged in this newspaper on the 'scandalous' quarter of a million euro golden handshake given to the bank's former legal official Michael Falzon when he was appointed Parliamentary Secretary, as well as details of millions in unsecured loans granted to Air Malta to make up for the airline's fuel-hedging discrepancies, the bank's top officials have been instructed to issue the gagging order.
According to our sources: "This internal memo goes against the very nature of what constitutes the rights and obligations of a Board Director, who should have clear and unobstructed access to all of the bank's business deals."
This newsroom is informed that officials from the European Central Bank (ECB) who form part of the Joint Supervisory Team along with members from the Malta Financial Services Authority (MFSA) showed concern over the information published by this newspaper.
It will be interesting to see how the ECB will take this fresh information that the bank's autonomy, which is usually reinforced by the transparency adopted vis-à-vis its elected board directors, is at stake following the arbitrary decision to bar directors from obtaining any information.
The reaction of the Malta Financial Services Authority (MFSA), if any, will also prove interesting, considering that it has not, as yet, pronounced itself on the information published by this newspaper regarding the unsecured loans the bank made to Air Malta.
What makes this situation even more embarrassing is the fact that the government holds a 25 per cent stake in BOV, with the right to appoint the bank's chairman.
The two incidents reported by this newspaper concern political decisions in which the government has a direct interest: the first concerning Michael Falzon's position as Parliamentary Secretary and the second regarding Air Malta's future in relation to negotiations with the European Commission. BOV is a private institution in which the government is not the majority shareholder and, as such, the bank should not be used as an extension of the government.
Speaking in Parliament following the stories which appeared in this newspaper, an evidently uncomfortable Tourism Minister Edward Zammit Lewis avoided the issue and asked the Opposition to act responsibly when pushing for answers in Parliament, unless it wanted to harm the employees of Air Malta and BOV.
But during the same parliamentary question and answer session, Opposition Leader Simon Busuttil would not be brushed off so easily on the subject, insisting that the government should come clean on the matter.
PN deputy leader and shadow finance minister Mario de Marco said the bank should put shareholders' minds at rest to the effect that the bank was not taking unconventional risks, such as that reported by The Malta Independent in relation to the unsecured loans given to Air Malta to purchase fuel. The bank's reputation is going down the drain with the revelation of such stories, he said.
Asked by this newspaper to confirm or deny the information, Bank of Valletta was not ready to comment on the amount of the unsecured loans given to Air Malta or who authorised them.
Similarly, Air Malta was not forthcoming with answers when contacted by this newsroom and the issue continues to be shrouded in a thick layer of silence and secrecy.
BOV has chosen not to confront the situation publicly or with its shareholders, which is curious considering that the ECB's bureaucrats on the Joint Supervisory Team have asked the government-appointed BOV chairman, John Cassar White, to refrain from attending and/or participating in the bank's business decisions related to the government and all its companies and authorities.
BOV has always excelled as a serious and reputable institution that is regarded favourably by international financial institutions. It not only employs hundreds of Maltese but is also the backbone of many local entrepreneurs who, over the years, have found a solid institution with whom to build their future.
"Whoever in the bank is harming one of Malta's best financial institutions with careless, politically-driven decisions should be made to answer," said a very irate private shareholder who spoke to this newsroom in the wake of our stories.
On Friday, the Opposition accused the government of turning BOV into "a Labour Club".