Banking supervisors have told Bank of Valletta chairman John Cassar White that the process the bank followed to assess the suitability of candidates for the board of directors was “transparent”.
This emerged in a letter sent to shareholders by Mr Cassar White and seen by the Times of Malta.
The chairman was referring to a court judgment that ordered the bank to stop the nominations procedure adopted by the board and to refrain from using it.
Describing the procedure as “an antithesis of EU banking regulation”, the court said BOV had failed to set up an independent nominations committee, as required by new EU rules, and instead Mr Cassar White instructed directors to make a self-assessment on their suitability and that of fellow candidates.
In his letter, Mr Cassar White said “the honourable judge made a number of serious allegations about the way the board which I lead conducted this suitability assessment process”.
He said he had communicated the judge’s remarks to the banking supervisors for any action they may consider appropriate.
In reply, they said the process to assess the suitability of candidates was “transparent” and it was not an “antithesis” of EU regulations. Instead they expressed their appreciation for how the bank was making efforts to strengthen its governance, according to Mr Cassar White.
He added that every candidate had to be assessed by regulators in a new process, the outcome of which was awaited in the coming days.
Although he respected the country’s system of justice, it was “ultimately the banking supervisors who decide whether I am suitable to serve as a director of such an important bank as BOV”.
The letter was sent to all shareholders in view of the next AGM, to be held in December, which must elect the new BOV board.
According to a statement issued by BOV at the end of last month, the Joint Supervisory Team, made up of officials from the Malta Financial Services Authority and European Central Bank, were informed about the manner in which the suitability assessment would be conducted as well as the results.
The court issued its judgment against BOV at the end of last month following a case instituted by one of the current directors, George Portanier, who felt aggrieved by a new way it had decided to approve nominations to the board.
Mr Portanier, who has been sitting on the bank’s board for 22 years, asked the court to issue a prohibitory injunction after his fellow directors decided that he was not fit to act as a BOV director any longer.
As a result of this exercise, Mr Portanier was found not to be fit for re-election.
Asked why he felt he should write to shareholders over the court judgment and whether his declarations might amount to a contempt of court, Mr John Cassar White did not wish to comment. “As there might be a court case relating to this issue I am not in a position to comment,” he said.
Mr Portanier called the letter “unethical” as it attacked a court judgment. “Court judgements are there to be respected and not commented upon,” Mr Portanier said when contacted.
“The letter also seeks to influence shareholders, who will shortly be voting in an election. This influence is being financed by the bank’s funds,” Mr Portanier complained.
Asked whether he would be seeking further court action, Mr Portanier said: “I am contemplating all procedures possible to safeguard my rights, and to protect my position against unfair prejudice and discriminatory treatment,” he said.