In my previous column in this newspaper, I asked who will be protecting the ordinary taxpayer in the negotiations going on between the government and representatives of the ex-National Bank of Malta (NBM) shareholders, who are demanding compensation for what, in their view, was abusive dispossession without compensation of their holdings leading to the nationalisation of the business and the setting up of Bank of Valletta.

I expressed disagreement with any out-of-court settlement on the eve of an election, which smells like one for the road favouring friends at the expense of the general taxpayers.

Unsurprisingly, this prompted a vitriolic reaction by the representative of the ex-NBM shareholders, who seem to be already counting their fortune as they attempt to exploit a vote-sensitive government without a majority in parliament that will be forced to seek a new mandate sooner than it had planned and wished.

Jeremy Cassar Torregiani (JCT) insists that anyone who disagrees with his view of the world must be both a liar and short of integrity. He asks who will be protecting their (ex-NBM shareholders) human rights and dignity.

In any democracy it is the third branch, the courts, that has the function of protecting citizens from abuse by the executive and legislative branches. So the answer to JCT’s question is simple: the courts will protect your human rights and dignity – the same courts that the ex-NBM shareholders are attempting to short circuit, using pressure on government to settle out-of-court without as yet having given any proof that there is a real case for compensation. And I must stress that the onus of proof lies on the person making the claim for compensation.

JCT called me a liar because I am attempting to plant division between ex-NBM shareholders and the general corps of taxpayers, arguing that as the former are also taxpayers, they are one and the same thing. This is like saying that because some Maltese are six feet tall, then all Maltese are six feet tall. It is like saying that anybody who chips in the usual fifty cents in the offertory plate at Sunday Mass has the right to the full amount collected because he has contributed to it.

I do not mean to repeat myself, but I must reiterate that the only instances where compensation could be considered as fairly due are:

either that the run on the bank was instigated by government with malicious intent, or

that the Central Bank failed in its duty by refusing to provide lender-of-last-resort facilities

Nothing said by JCT and Anthony R. Curmi goes anywhere near offering any convincing proof in respect of either hypothesis.

There is one point raised by JCT which further proves how dangerous it would be to have this matter settled in any way except through proper Court proceedings. Whereas so far JCT has said that the then Governor of the Central Bank of Malta had given the NBM Vice-President a verbal warning to “put your house in order as it will happen” in his latest comments, JCT adds a bit more. He now claims that the then Central Bank Governor added: “that he knew for a fact Mintoff had his eye on the bank and to prepare for the attack as best he could”.

Only the Court can decide the veracity of these claims by receiving dispositions under oath from the then Governor of the Central Bank to see exactly what he said and to whom. What JCT is saying is a detto del detto del detto – three stages removed from the supposed originator. But it seems illogical give such a warning in the same breath as another warning to “put your house in order”. To put a house in order it must be out of order, and the Central Bank was well in the know as to whether the NBM’s house was in order or not. Excluding the ex-NBM shareholders, there seems to be general agreement that the NBM house was not in order and this is corroborated by the then Governor of the Central Bank and by ARC (and many others who were involved in the establishment of the Bank of Valletta on a professional basis) who also wrote in reply, but this time using laudable language in my regard (for which I thank him).

But when all is said and done, even ARC’s contribution does nothing to prove either of the hypotheses that could make a case for compensation. Statements like “it was common knowledge that, in certain quarters, the word was going round urging NBM depositors to withdraw their funds” is too vague to be any proof that government was behind these “certain quarters”. The fact that Mintoff had appeared on TV appealing for depositors to calm down proves, if anything, that the run on the NBM had begun before Mintoff made that TV appearance and that he tried to calm the situation rather than manufacture the run, as he is now being accused of doing. That he did not succeed cannot be held against him.

ARC’s argument that the taxpayers, through an out of Court settlement, would be in the same position as after the Court decides in favour of the plaintiffs is inverse logic. There is no assurance that the Court would decide for the plaintiff and even if it were to do so, then at least the taxpayers would know that they are paying for what is properly due. Damages paid to Mintoff regarding Delimara were, in fact, paid after a proper court decision and not through some amicable back-scratching agreement.

ARC also takes it against me because I said that an out-of-court settlement would be unjust to ex-shareholders. He mistakenly understood that I was referring to shareholders of Bank of Valletta. I was, in fact, referring to the ex-shareholders of the NBM, who have repeatedly stated that they are in this mostly for the honour rather than for the money. An out-of-court settlement, however, cannot fix the honour: that can only come from an independent court decision. An out-of-court settlement can only fix the money and will leave both ex-shareholders and the general taxpayers with the bitter taste of justice not done. But possibly the ex-NBM shareholders do not mean what they say and, in fact, are in this for the money much more than for the honour.

Ho what I find particularly objectionable is the argument that because the government has had a good return on its investment in Bank of Valletta, the taxpayer should not object to an out-of-court settlement to appease the ex-NBM shareholders. By the same argument, we would be entitled to make a claim for part of the losses of our shipyards from HM Admiralty, Bailey and Swan Hunter. Some hope!

Unfortunately, JCT and ARC seem not to appreciate what is the role of shareholders in a business venture. What they are proposing is socialisation of losses and privatisation of profits. They are sanctifying moral hazard.

And it is strange that the government, on the one hand, seems inclined to usurp the role of our courts to redress purported injustices ostensibly committed 40 years ago, and on the other hand commits new injustices like the case of expropriation of land at Marsa with compensation based on its agricultural value to have such land dressed up with a Mepa permit within a week and instead of using it for public purposes – which underlies such expropriation – issues it for commercial development by the private sector. Rather than addressing purported injustices that are being examined by the courts, government efforts would be better employed avoiding new injustices.

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