The Malta Financial Services Authority has felt it appropriate to issue this media release in order to update the public on the recent developments in connection with its investigations of the La Valette Multi Manager Property Fund.
It will be recalled that back in May 2011 Bank of Valletta plc had announced a conditional offer to all shareholders to acquire their shares in the Fund at a cash price of € 0.75 per share. This offer was subject to the condition that, upon an investor accepting this offer, such investor would forfeit all legal rights as against Bank of Valletta plc, and had to be accepted by the 30 June 2011. At the time the offer was issued, a number of investors had filed complaints with the MFSA which were still pending. The MFSA was reviewing these complaints, the number of which was unprecedented. These investors were being required by Bank of Valletta to decide by the 30 June 2011 whether to accept or reject this offer, and consequently whether to forfeit their legal rights against Bank of Valletta, and this at a stage where their complaint was still being investigated by the MFSA. The Authority experienced delays in reviewing these complaints partly due to an uncooperative attitude adopted by Bank of Valletta.
In view of this state of affairs, on the 28 June 2011 the MFSA had issued a directive to Bank of Valletta plc in terms of article 15 of the Investment Services Act. This directive obliges Bank of Valletta to ensure that any acceptance of the offer to investors is without prejudice to any right which such investors who have either filed a complaint or were otherwise ineligible to acquire units in the Fund because they did not satisfy the legal criteria of “experienced investors” may have to compensation or to being reinstated in the financial position obtaining prior to their investment in the Fund.
Bank of Valletta has recently appealed to the Financial Services Tribunal contesting this directive and is seeking to have it revoked. Moreover, Bank of Valletta is also requesting the Financial Services Tribunal to keep the proceedings secret and to hold its sittings in respect of this appeal behind closed doors. The MFSA is strongly opposing these requests as it believes that justice is best served if proceedings are held in open court, and this in the interest of transparency and accountability to the public.
The MFSA’s investigation on misuse of information is now in the very final stages of completion. The MFSA shall be making its findings public imminently. The investigation on mis-selling of the Fund to inexperienced investors is also at an advanced stage, and the MFSA shall be communicating its final position on this matter to Bank of Valletta by the end of the year.
Finally, the MFSA welcomes the Data Protection Commissioner’s decision, which, as reported in the press, has forced Bank of Valletta to allow investors to access their Client Fact Finds.
