A delegation from Bank of Valletta, headed by its Chairman John Cassar White, will be meeting officers from the European Central Bank (ECB) in Germany during the coming days, this newsroom can reveal.

The meeting with the ECB will undoubtedly have on its agenda recent decisions taken by the bank which were exclusively revealed by this newsroom in great detail.  The Malta Independent had revealed that the ECB complained on the corporate governance adopted by the bank in recent months. In a statement following a story published in The Malta Independent on Sunday, BOV admitted that it engaged an expert to advise the bank on how to strengthen its procedures for the opening of accounts by foreign companies and individuals. The bank did not deny that some 850 bank accounts were opened in haste by former PL treasurer and electoral candidate, accountant extraordinaire Joe Sammut, in the name of Libyan clients seeking residency permits and Maltese passports.

Mr Sammut was charged in court yesterday and released on bail after pleading not guilty to charges of fraud, misappropriation of funds, money laundering and the falsification of documents.  

Earlier this year this newsroom reported that the ECB asked Chairman John Cassar White to refrain from participating in business decisions related to the Maltese government, due to the potential conflict of interest since the government owns a 25% stake in BOV with the right to appoint the bank’s chairman.

BOV came under fire when it was revealed that loans to private consortium Electrogas, currently building the new power station, were issued against an €88 million government guarantee, which has now been extended to €360 million. It was also revealed by this newspaper that the bank issued unsecured loans to state owned Air Malta for its fuel hedging discrepancies.

In an effort to control the leaks, a ban on the bank’s board directors who try to rightfully seek information was initiated following the string of stories leaked to this newsroom.

This newsroom tried to get the Chairman’s comments, and those of the CEO, in two separate interviews, which have been turned down by the bank. The interviews were requested following information by sources within BOV who claim that corporate governance has been weakened and a shroud of uncertainty is overshadowing the bank’s workforce.

A number of employees who spoke to this newsroom claim that the new roles affected within the bank’s organisational structure during the first months of the year have opened the floodgates to confusion within the ranks. This newsroom has seen copies of the new organisation chart, which now boasts a variety of new Chief Officers, Executive Heads, Heads and Senior Managers all tagged in ‘yellow boxes’ as the new breed of leaders answerable to the Chairman or the Chief Operations Officer Mario Mallia. Mr Mallia, who has been working closely with Mr Cassar White, is being touted for the post of CEO once Charles Borg’s contract expires towards the end of the year. 

The bank’s employees who spoke to this newsroom alleged that certain moves and promotions smack of nepotism. Our sources, for example, found very hard to grasp the motives behind employing an ex HSBC worker in an important executive position following an internal call for applications which proved to be futile since no one was found to be fit for the job from within BOV.  To add insult to injury, the person within the bank best qualified for the job and who worked in the same office was relegated to head the corporate strategy answerable to the former HSBC worker now earning a cool €70,000 in his new job.

(BOV chairman John Cassar White)

This is neither the first not the last person from outside the bank to be selected for a top post at BOV. Our sources revealed that yet another important and highly paid post is about to go to an ex BOV employee who had left to join a smaller bank in Malta but is about to return to occupy the post of Chief Officer. The bank employees who spoke to this newsroom are livid at the fact that once again no one from amongst them seems to be qualified for the post notwithstanding the years of experience they have acquired working for BOV.

It is not clear what the policy in the financial services sector states vis-à-vis bank executives who cross from one bank to another given the highly sensitive information they carry with them. 

Sources within the bank claim that an extraordinary shareholder’s meeting is inevitable as a result of the ‘shameful corporate governance’ currently adopted at BOV.