BOV intends to bring up the issue of fair hearing in the Deiulemar case, and is considering bringing forth the same argument in relation to the issuing of the precautionary warrant earlier today, arguing that the town where the case is being heard has too many people directly involved.
A precautionary warrant of €363 million issued against the Bank of Valletta after the bank lost its appeal in an Italian court earlier today.
The case began after liquidators of the Deiulemar shipping company, together with representatives of 13,000 Italian bondholders filed the court application against BOV after they lost their life-savings over the scheme dating back to 2014.
The €363 million was allegedly 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. The shipping line's owners had allegedly been engaged in asset stripping since at least 2005, through the setting up of numerous companies which were often based overseas.
The bank's Chairman - Taddeo Scerri, CEO - Mario Mallia, and lawyer Henri Mizzi highlighted that the town where the case is being heard, Torre Annunziata, has a population of around 40,000, 13,000 of whom had lost their life savings as a result of the company. As such, the bank intends to argue on the point of fair hearing to have the case moved to another location, with representatives explaining that in the criminal trials against the directors of Deiulemar, the cases were heard in other jurisdictions. Asked by this newsroom whether they are also able to argue breach of fair hearing in the precautionary warrant appeal issue, they said that there is a court judgement which could open that door, and they are considering the possibility.
While Deiulemar had passed the BOV due diligence back in 2009, it might not have passed today, BOV CEO Mario Mallia said in response to a question by this newsroom.
Asked by this newsroom about the due diligence process, the BOV heads argued that the due diligence boxes were ticked back in 2009, but stressed that due diligence today is much more stringent than it was back then, thus casting doubt over whether the Bank would have gone for that investment today.
In addition, Taddeo Scerri, the bank Chairman, stressed that the bank went out of the Trust business altogether last year, stressing that the Trust business is not profitable enough for banks to be in, and said that this case did influence the decision. "It is the epitome of problems that a business which doesn't give enough return could bring."
Addressing a press conference, the CEO, together with Chairman Taddeo Scerri, argued that this was just a preliminary part of the case, and that the actual case still had to be heard. They argued that they had a very strong case, and that the bank's operations would not be affected, and that clients, depositors and employees have absolutely nothing to worry about. They made clear that the bank has no intention of laying off any employees, and that the bank is in fact recruiting. They also said that if the bank loses the final case, it would just be a drop in the ocean. The bank is confident it will not lose. They said that BOV has a balance sheet of around €12 billion.
They said that the €363 million has been deposited in an Italian bank, but stressed that the money still belonged to BOV, and that any interest being made is being sent to BOV.
On the merits of the case itself, Henri Mizzi, a lawyer for BOV, argued that the bank still cannot understand where the plaintiffs got the €363 million sum from. He said that the bank had essentially acquired the ultimate holding company for Deiulemar back in 2009, which at the time had an estimated value of €363 million, but also had €363 million meant to go to shareholders, so the company was valued at zero, he said. In addition, the bank's assets had already been sold off.
Photos and video by Alenka Falzon