Bank of Valletta (BOV) said on Tuesday that it has lost the Deiulemar case, with an Italian court ordering it to pay €370 million. The bank said it will be appealing the decision.
The bank said that over €360 million had been put aside in 2018 as a precautionary security for this situation, and that no new payment will be made as a result of this decision.
The case began after liquidators of the Deiulemar shipping company, together with representatives of 13,000 Italian bondholders filed a court application against BOV after they lost their life-savings. In 2009 BOV had allegedly taken over a trust that held €363 in assets of the shipping company, which went bankrupt in 2012. In 2014 a number of members of the founding families of the shipping company were jailed for illegal financial transactions. When the shipping company went bankrupt, the bondholders who lost their lifesavings turned to the Maltese bank. BOV disputes the amount claimed.
In a statement on Tuesday, Bank of Valletta referred to past company announcements whereby the bank had informed the market that legal proceedings had been instituted against it before an Italian Court. "The Bank has today been informed that the Tribunal of Torre Annunziata has delivered its decision against the Bank in aggregate an amount of €370 million including legal interests and costs. In line with advice received from legal counsel, and consistent with several legal opinions as to the underlying strength of our case, the bank shall be immediately appealing this decision."
BOV said that under these proceedings the bank was being requested to pay an amount equivalent to the value of the shares of a company which had been settled on trust with the Bank as Trustee, and which value the plaintiffs were alleging amounts to €363 million. "Bank of Valletta disputed this claim as shares held were deemed worthless following the bankruptcy of Deiulemar Group. The Bank held no other assets on behalf of the Deiulemar Group. Pending such appeal, the Bank would like to assure the market that it is well capitalized and its operations will not be adversely impacted by this decision."
"In 2018, the Bank had placed in excess of €363 million in the hands of an independent entity, following an order from the Tribunal of Torre Annunziata as precautionary security. No new payment will be made as result of today's decision," the bank said.