However, during the meeting BoV chairman Roderick Chalmers “expressed regret” for the poor performance of the bank’s La Valette Multi Manager Property Fund, according to a story posted today on the website of the Times of Malta.
Paul Bonello, managing director of Finco Treasury Management, a Maltese financial management company which has been campaigning on behalf of clients who were invested in the BoV fund, said today that he did not regard the lack of a protest yesterday as either surprising or significant.
More important, he said, will be the annual meeting in January of La Valette Funds SICAV, of which the poorly-performing multi-manager property fund had been a sub-fund, and of which the Bank of Valletta is custodian.
“The chairman made it very clear that he would be taking questions only on the [AGM] agenda, so any questions on the property fund would not have been answered,” Bonello said, adding that few if any of the shareholders at the meeting were likely also to have been investors in the La Valette fund.
Change in tone
Bonello said it was also significant that the bank’s “general tone” with respect to the fund appeared to have begun to shift away from its earlier “arrogance….when [its] message to the clients who had entrusted their savings with them was ‘to put up or shut up’.”
“There is for the first time an expression of regret ‘at the poor performance of the fund and the impact that this has had on investors’,” Bonello said.
Referring to a statement by Chalmers that he noted was contained in the bank’s audited accounts, which were dated 29 October, Bonello added: “It is also positive that the bank states that it will face up to and accept its responsibilities if its decisions and actions are found to have been wanting.”
Maltese press reports ahead of the meeting had predicted that some shareholders attending the meeting would call attention to issues about the way the BoV fund had been managed.
As reported, hundreds of Maltese investors are seeking a return of their investments, plus interest and expenses, on grounds that they were misled by the fund’s managers as well as by the Bank of Valletta, as the fund’s custodian, about key details of the way the funds were managed.
The collapse of one of the BoV fund’s main investments – Jersey-based Belgravia Financial Services Group’s Belgravia European Property Fund – was a major reason for the BoV property fund’s poor performance, although another eight funds were also cited by the investors in their judicial protests.
In his statement yesterday to shareholders, Chalmers said the bank was doing its best to minimise the negative impact on investors, according to the Times of Malta.
Chalmers “steered clear from addressing the accusations made” concerning the fund, and said there was “a material difference” between the facts and the allegations or innuendos made by the investors, the paper reported. It said Chalmers “also expressed regret at the approach of some investors who he said tried to question the bank’s integrity”.
Row touched off in August
As reported, Finco touched off the public row with BoV, which is 25% owned by the Maltese government, in August when it filed a judicial protest, in which it listed problems with the way it said La Valette Multi-Manager Property Fund was managed.
Under Maltese law, a judicial protest is a way of keeping alive the option of filing a legal action which otherwise would expire with time.
Finco’s chief argument is that the fund’s massive losses had been caused by excessive gearing by the funds in which the fund-of-funds was invested, and that this level of gearing violated the terms of the fund’s investment prospectus. The bank has denied that its managers had been at fault.
