The Malta Independent 11 November 2019, Monday

Overdue compensation to National Bank of Malta shareholders (part 6)

Sunday, 30 June 2019, 08:37 Last update: about 5 months ago

Anthony R Curmi


One may now be wondering how matters progressed after the submission of my affidavit to the court in January 2015.

When the court will determine the amount of compensation payable to NBM shareholders is a matter for conjecture, as it depends on various factors. What seems certain is that the government, through the Attorney General (AG), will continue to do everything possible to delay a final decision. I make this statement in the light of events since the submission of my affidavit.


At the risk of sounding presumptuous, I dare say that the affidavit, coming so soon after the Appeal Court decision and at critical stage of the court proceedings, created panic in government. The immediate reaction was for the AG to request the court that I be cross-examined by him. The first session was set for November 2015 (nearly a year later). Thereafter, the AG requested a further two sittings, which resulted in my submissions being challenged during no less than over five hours in court sittings, extending over a period of three months until February 2016.

Although stressful for me – being already in my eighties – this did give me the opportunity, when answering questions put to me by the AG or explaining why I disagreed with his own assertions, to reiterate and emphasise some of the points raised in my affidavit which led me to come to the reasonable conclusion that there can be no doubt that the NBM had a substantial positive net asset value in December 1973 and certainly not a negative one, as had been alleged.

Interestingly, representatives of NBM shareholders and even the lawyers present in the courtroom during these sessions kept telling me that they could not understand why the AG was persisting in his cross-examination when it was clear that he was not making much headway with his attempt to discredit the contents of my affidavit, especially where matters of a technical nature were concerned. For example, I was amazed when he even opined that the NBM’s net asset value was solely its paid-up capital and did not include the reserves (accumulated profits).

At the conclusion of the three court sessions during which I was cross-examined by the AG, the government decided to seek the help of three foreign experts (including two from across the Atlantic) who, in April 2016, submitted to the court their counter comments to my affidavit. They were accorded further time to present their views in court sittings in May/June, thereby prolonging the saga.

Their main contention was that the NBM was a ‘failed bank’ – and this notwithstanding the fact that the Appeal Court had already ruled that value had passed from NBM shareholders to the government and ignoring major points brought forward in my affidavit asserting that the NBM could not have been deemed to have had a negative value in December 1973 (when the Council of Administration had taken over control and, about three months, later Bank of Valletta) but had a sizable surplus.

I consider the recourse to foreign experts as being odd and unusual. Their report reflected a complete lack of knowledge or understanding of the political situation in 1973, including the abusive manner – amongst other tactics – in which members of the NBM board of directors were even threatened with the removal of limited liability.  In support of their contention that the NBM was a ‘failed bank’, the experts resorted to accounting principles that were not even in force in 1973. One fails to understand why the government felt the need to resort to such experts when surely ample Maltese expertise in the accounting and banking sectors was already available in Malta.

The end result was that the presiding Judge, confronted with widely different views as expressed in the reports of the foreign experts and in my affidavit and subsequent testimony in court under oath, ruled that it was desirable to resort to yet another court-appointed expert to weigh the arguments on both sides and to report to the court with a view to a final decision being made on the amount of compensation payable by the government to NBM shareholders.

Since then, plaintiffs and defendants have been at loggerheads and unable to produce a mutually agreeable name to be proposed to the court. The AG continues to insist on the appointment of yet another foreign expert (doubtless at more high costs to the taxpayer) whilst the plaintiffs have proposed the names of no fewer than five Maltese professionals, none of whom, as yet, seems to have found favour with the government.

All this has delayed matters for the best part of three years, with no end in sight: a clear case of justice delayed, justice denied. In part 7 of this series – the final part – I will deal with the compensation proposals.

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