Jokingly, a friend reads BoV as ‘ Best On Valium ’ and MFSA as ‘ Manifestly For Self-Aggrandisement ’. Dead on.
A week from the chairman’s resignation, the bank remains without one. A fuzzy situation. Who knows what might be going on in the corridors of Maison Demandols? One thing is certain : the new one’s ego can hardly be bigger !
For nigh 2 years BoV shareholders have had to put up with a proud government-appointed chairman who boastfully assumed total responsibility, when he did not need to, for the mismanagement of most of the funds which the bank’s subsidiary had induced/seduced its clients to invest their life-savings in. But afterwards he refused to accept that his bank did anything wrong, even after being fined seven times by the MFSA ( six for the MMProperty Funn and one for Lehman Perpetuals ). To the only defender of the hapless investors he publicly exclaimed ‘ put up or shut up ’, but cowered when Finco did in fact put up. And he never apologised for his rudeness.
Instead, he repeatedly maintained that there had not even been a whiff of wrongdoing by the executives, forecasting confidently that “ those who made unsubstantiated allegations will then be as vocal to retract them ”. MFSA allowed him a year to rethink his stance, but in vain.
Finco was eventually vindicated by the MFSA in all its 3 reports ; the chairman then feigned sensitivity to pressure from his co-directors and merely admitted to ‘ lessons ’ having been learnt.
All along, over the last year or so, BoV has not only had to fork out € 15m part-compensation to the MMPFund shareholders, € 1m in fines and several not-divulged substantial fees to firms of auditors and lawyers, but has lost to other banks many of its investing clients such that its profitability, from near parity with HSBC’s, has dropped to 60% thereof, reflected in the 30% drop in market value of its own shares on the Malta Stock Exchange.
More still in the pipeline. Most of those made to invest in Lehman Perpetuals have already been compensated in full. We don’t know as yet how much this has cost BoV. Plus a further € 5m already earmarked to make up the initial investment of the MMPFund investors in the course of the next 6 months during which tens of thousands of euros will be paid to an expensive accountancy firm merely to identify the experienced from the inexperienced investors.
Ask yourself : can you imagine a more ridiculous situation ? When last year BoV paid up 75 cents per share, it did not distinguish between investors. But not now for the balance of 25 cents ! Unbelievable.
The reason, of course, is that the MFSA wants to be perceived as too clever by half. Purely for self-aggrandisement. Furthermore, how else can one attribute its refusal to explain why its third report was published a year later than it should and could have been ?
The problem with MFSA is that it teems with lawyers. To the extent, for instance, that one is likely to observe four of its several lawyers in attendance in cases before its very own Appeals Board, something which could well occur if BoV decides to appeal its latest penalty.
Not so long ago even the Registrar of Companies under its wings was a lawyer. His copious staff whiled away their time sending back forms of Annual Return for trivialities like converting LM as € 2.3294 instead of € 2.329373 , for writing down ‘ ABC Co. Ltd ’ instead of ‘ ABC Company Ltd.’ , even for leaving out a comma, not to forget about the fining of companies for a number of accumulated years’ omission in submitting their Annual Returns when they could have been informed after the first year’s unintended omission - but then the fine wouldn’t have been so hefty !
The fact that Malta has become a reputable domicile for foreign funds is due chiefly to the clever pertinent legislation agreed to with the Opposition and the ongoing competitive operational costs, rather than any efforts by MFSA staff. Any dynamism belongs to the Malta Funds Industry Association, not the MFSA, though it is the latter which takes full credit for issuing licences to 500-odd Collective Investment Schemes and Sub-Funds, as well as administrators induced to set up offices in Malta.
It is about time the MFSA starts transforming its current boasts into merited credits. Fewer lawyers would surely help.
Dear Minister, before you quit your portfolio, at least appoint a chairman for BoV devoid of political patronage, and initiate a reform in MFSA’s management.