Bank of Valletta believes that it has a strong case in appealing against an Italian precautionary warrant for €363 million issued against the bank.

An Italian court had upheld the staggering claim, which is subject to appeal.

TorreChannel.it broke the story when it announced the court's decision on Tuesday. Liquidators of the Deiulemar shipping company, together with representatives of 13,000 Italian bondholders from Torre del Greco filed the court application against BOV after they lost their life-savings over the scheme dating back to 2014.

It has been reported that the €363 million was held in trusts at BOV by owners of the now defunct shipping giant, Deiulemar, registering losses of more than €800 million. The company went bankrupt in 2012.

In the wake of the collapse, seven people were imprisoned with the highest prison sentence reaching 17 years.

Liquidators alleged that BOV allowed Deiulemar owners to set up three trusts, a vehicle for them to illicitly funnel money into. BOV became a trustee for all three: Capital Trust, Trust Gaino and Trust Gilda.

The Italian courts appear to support this view after it ordered a prohibitory seizure of the €363 million held at BOV.

BOV statement

In a statement, BOV said that as previously announced by Bank of Valletta p.l.c. (the Bank) by means of company announcement issued on the 2 April 2015, "legal proceedings were instituted against the Bank before the Tribunal of Torre Annunziata (Italy), in terms of which the Bank is being requested to pay an equivalent to the value of the shares of a company which had been settled on trust with the Bank in 2009, and which value the plaintiffs are alleging amounts to €363 million."

"Legal proceedings in Italy are still at the preliminary pleas stage, and the Tribunal has not yet started hearing the case on its merits. As part of these litigation procedures, the Bank has today received notice that the Italian Tribunal has issued a precautionary warrant ("sequestro conservativo") for €363 million against the Bank. The Board of Directors, after taking legal advice, believes that it has a strong case both on the merits and in appealing the 'sequestro conservativo' and is firmly rebutting the claims instituted against it before the Italian Tribunal. At the same time, the Bank is keeping its Regulators continuously updated on developments relating to this case. The Bank will continue to keep this matter under review and take such measures to ensure that its operations are not adversely affected."