The six-weeks delay in appointing a new chairman for Bank of Valletta was, at first, considered as an effort by the Minister of Finance to find someone who could possibly, even if slowly, redress the damage to the bank’s stakeholders inflicted by the excessive pride, obstinacy and insensitivity of its board of directors throughout the long saga of the MMProperty Fund. This, incidentally, is still ongoing.
It certainly was not. The new chairman is not one who could repudiate, even gently or indirectly, any of the acts or omissions that caused heavy losses to shareholder-value, hefty penalties imposed by the MFSA, misery to hundreds of small innocent investors and, worse of all, a deep dent in BoV’s erstwhile top reputation in Malta’s banking sub-sector. How could he when he himself had been, perhaps inadvertently, an accomplice in the fiasco as an active partner of the auditing firm (PwC) which was supposed to give out early warning signals when misdeeds were suspected? And these were several and serious, culminating in three MFSA damning reports.
As is the habit with directors who seem to be there ‘ only for the beer ’ , they all kept mum at BoV and left it to their chairman to face the onslaught of public criticism. No one of them demurred, at least not in public, even though one or two are rumoured to have expressed scepticism during private conversations.
It is also doubtful whether, ethically speaking, a recent ex-auditor of any company, let alone a bank, should qualify to be appointed a director of that company.
But who else can guarantee the continuance of the previous chairman’s aggressive style of leadership, bordering on the bullying, better than someone who probably advised him all along, having even partnered him in the very same auditing firm ? That’s the nub.
The Minister must have pondered for weeks on this, judging by the names of ‘inner-circle’ members whose names were bandied about in the media as potential appointees to BoV’s chair.
In my view, what the bank needs to have as chairman is someone who can draw up the following agenda for his/her first board meeting, viz:
1. An apology to Finco Trust for the puerile withdrawal of credit card facilities.
2. An immediate payment to all ex-MMPFund investors of € 0.25 per share as instructed by MFSA, plus another € 0.10 by way of compensation for forfeited interest since the Fund’s collapse.
3. A thorough investigation to establish whether there had been cases of ‘insider information’ provided to those who disposed of their MMPF shares inside 3 months prior to its collapse.
4. Instant termination of all agreements with those investment experts responsible for hiving MMPF funds in any of the Belgravia sub-Funds and/or in Lehman Perpetuals.
5. Blitz courses, possibly with MFSA cooperation, for all branch officials entrusted with advising clients on the bank’s various investment products in an effort to revamp this important division.
6. An advertising campaign focusing on the above issues, particularly emphasising the bank’s resilience in facing anticipated global/European crises.
Am I fantasizing? Possibly. But who knows ? A general election might well turn fantasy into reality.