The Malta Independent 2 April 2020, Thursday

Curmi and NBM – A Pinocchio Story

Sunday, 26 January 2020, 11:56 Last update: about 3 months ago

Piero Ugolini & Richard Nun


After reading Curmi’s latest diatribe in the media (TMIS November 24), one recalls the fairy tale character “Pinocchio” whose nose grows longer each time he stretches the truth further. Like Pinocchio, Curmi takes snippets of information, only some of which are fact, and twists them into false and/or misleading claims. More recently, since he cannot challenge our conclusions with evidence and hard facts, he has resorted to attacking our integrity and independence.


We wish no tit-for-tat exchange with Curmi, but it is imperative that we respond so that the Maltese public hears and understands the truth.  Here are a few of Curmi’s unfounded claims, and our reply with the facts –

Curmi claim: “Insofar as I am concerned, if – during my lifetime – I have the satisfaction of seeing NBM shareholders being awarded fair compensation by the court, whatever remuneration might come my way will be donated to a charity of my choice.”

Truth: Mr. Curmi has claimed for years that he was doing all this for “amor di giustizia’ [“in the spirit of fairness or justice”]! Now, however, he says “…whatever remuneration might come my way…;” it is obvious that Curmi anticipates remuneration. Whether it is subsequently donated to charity – in the spirit of fairness, of course – is irrelevant; he is expecting to be compensated for his affidavits and articles!

Curmi claim: Referring to Mr. Ugolini, Curmi said: “It appears that his remuneration had nothing to do with advice on the NBM issue and that in 2015 he had already been on the payroll of a government quango for some years. Therefore, he cannot claim to be an independent expert in a court case against that same government.”

Truth: Mr. Curmi’s claim is blatantly false and misleading! Mr. Ugolini or Mr. Nun have never been on the Malta Government payroll. We are totally independent; we provide objective, fact-based advice and analysis; and, any compensation we have received is not dependent in any way on the outcome of the NBM case. Mr Ugolini was an independent advisor to the MFSA and had no involvement whatsoever in regard to the NBM case.

The amounts of compensation quoted by Curmi for Dr Ugolini are fake news that were circulated together with other false stories to discredit the management of the MFSA.

Curmi claim: “The indications are that the services of Ugolini, Nun and Larry Chilton… were sought by the government on the NBM issue after the payments quoted above were made. I remain amazed that the government resorted to no less than three foreign experts instead of engaging – surely at much lesser cost – one or more Maltese from the large body of competent persons available locally with wide experience in banking and accountancy.”

Truth: Unlike any experts in Malta, Chilton and Nun have worked on hundreds of bank failures in the U.S. and abroad, and it is because of this level of expertise that they were engaged by the Government to provide independent analysis and advice on the NBM failure. As for the cost, the total amount paid to Chilton, Nun, and Ugolini is considerably less than what reputable legal firms in Malta charge and is de minimis compared to the fees charged by international accounting and consultancy firms.

Curmi claim: “The experts wrongly assert that I used ‘creative accounting’ to arrive at a figure of €400 million by way of possible compensation to the NBM shareholders.In the conclusions of my affidavit I was careful not to make a claim for a specific amount of compensation on behalf of the shareholders.”

Truth: In his first Affidavit Mr Curmi claimed Euro 325 millions, which then became 375 millions in his Addendum Affidavit, both in 2015. Then, using his irrational formula for calculations, Mr Curmi creatively links compensation to BOV profits over time to inflate the total to over to 400 millions! The ‘inconvenient truths’ cleverly omitted by Curmi are that NBM was mismanaged, capital deficient, swamped with non-performing loans, and depositors were anxiously trying to withdraw their money. Given these circumstances, there is no plausible way that NBM could have made the same profits as the BOV. Indeed, in his May 17, 2017 article titled “National Bank and Fiscal Surplus”, Mr. Curmi “…innocently quotes 426 millions as government profits over time…”

Regarding Mr. Curmi’s statement in his affidavit of January 2015 that he was “…careful not to make a claim,” he said: “In my view, it is logical for the NBM Group shareholders to expect compensation of Euro 325 mn.” Then, a few months later in his Addendum to the Affidavit he said: “…the figure of Euro 325 mn indicated by me as fair compensation last January now rises to Euro 375 mn.”

Conclusion: The “Trio” of experts will review the evidence and advise the Court. As for our conclusions, we have proved beyond any reasonable doubt that the NBM was poorly managed, illiquid, and insolvent, and that Government intervention was the only thing that prevented total collapse. By taking control, recapitalizing the bank, and establishing the Bank of Valletta, Government saved the deposits of the Maltese population and prevented extreme harm and disruption to the Maltese economy, as well as a tarnished reputation that would have hampered development of Malta as a financial center.


Independent consultants: Piero Ugolini – former Assistant Director IMF and senior financial sector consultant; and Richard Nun – former Deputy Director Texas Banking Department and IMF senior financial sector expert.


[This response was originally submitted to TMIS on 26 November 2019]


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