An American proverb says that ‘Promises are like piecrust made to be broken’. The Malta Financial Services Authority and the Ministry responsible for it, have promised the hundreds of local investors who have lost substantial hard-earned savings in the La Valette Multi Manager Property Fund, that the outcome of the investigation carried out months ago were to be published. Apparently it was just a broken promise.
The MFSA did conduct an investigation on the management of the La Valette Multi Manager Property Fund. As a result, the Bank of Valletta and the Valletta Fund Management were fined almost € 350,000. The bank and the Fund Management company were found to have breached a number of provisions of the Investment Services guidelines. Another investigation into alleged mis-selling of the fund is still pending.
However, the complaints of the people who have lost substantial sums of money have not been properly addressed. The investors are not after their pound of flesh. They want to know how the MFSA finalized the report and not what the conclusion was. The investors are still hoping that once the full report is published they can take the necessary remedial action to try and recover some of their lost earnings. Last January, one of the fund’s directors resigned following an MFSA reprimand that he disposed of his holdings whilst in possession of sensitive information as a director.
The bank and the fund management company are still trying to attract new customers to invest in the Multi Manager Property Fund. However, the prospectus does not take into account any of the administrative accusations. It has not been changed since the MFSA imposed the penalty and it is still I breach of a number of conditions – including that of not providing sufficient information to clients or potential clients.
The MFSA has promised these families a chance for some sort of remedy. It cannot keep the workings of its investigations away from the investors. The Prime Minister, through his special envoy, Dr. Simon Busuttil is trying to justify and defend the arrogance with which it has governed these last years. The government is not trying to repair broken promises but instead, trying to explain why the promises were broken. In Malta, it seems that the Government and its appointees forget that that they are there to serve the people and not the other way round. It is a people’s right and not a concession.