Bank of Valletta has told one of its leading critics that it is cancelling credit cards belonging to him and his wife, without giving them an explanation.

The bank informed stockbroker Paul Bonello of the decision in letters dated April 25 and April 30.

In the letters, seen by The Times, Mr Bonello is told that bank cards and services belonging to him personally, as well financial instruments held by the investment consultancy group he manages, are to be terminated on July 1 in accordance with the terms of the business agreement between the group and the bank.

Mr Bonello had brought to light irregularities and spearheaded efforts to hold Bank of Valletta accountable in the La Valette Property Fund debacle. The fund went bust in 2008, after it had invested in high-risk sub-funds, leaving several inexperienced investors out of pocket.

Last year, the bank and one of its subsidiaries were fined nearly €350,000 for regulatory breaches related to the fund.

Then, an investigation published on June 4 ordered the bank to compensate inexperienced investors and to pay an additional €200,000 fine.

The bank would have been informed of this decision about a month earlier under Malta Financial Services Authority regulations that require the authority to give financial institutions 30 days’ notice of any fines or regulatory action they are set to receive.

Mr Bonello suspects Bank of Valletta is now paying him back for his lead role in calling for investigations into the tainted fund.

“This is a blatant, knee-jerk reaction to the MFSA’s most recent investigation of Bank of Valletta, and there’s a clear retributive streak directed at me,” Mr Bonello has said.

He insisted he had nothing to hide, saying he was willing to waive any confidentiality clauses in BOV’s regard to allow the bank to publicly explain its decision.

But his offer made little difference to the bank, which declined to answer questions put to it by The Times. A spokesman said: “In keeping with the normal obligations and standards of professional secrecy, the bank cannot discuss any such matters”.

The spokesman added: “Professional secrecy is a crucial aspect in any banker-customer relationship, with trust and mutual respect being key elements for such a relationship to exist”.

They, however, insisted that the bank was neither confirming nor denying questions about the reasons behind their decision to terminate Mr Bonello’s accounts.

Outraged, Mr Bonello has written to the Prime Minister, demanding that the government, as the bank’s largest shareholder, provide “legally valid, objective reasons” for his account cancellations from the bank’s board of directors.

His request has been rebuffed by the Prime Minister’s Office, with a spokesman telling The Times Mr Bonello was barking up the wrong tree.

“If Mr Bonello feels aggrieved, the Prime Minister is not the competent authority where he should seek redress. He may do so with the regulatory authority [MFSA] or take other legal action.”

The spokesman added that the government “does not have the right to intervene in decisions taken by the board or bank’s management”.

Seventy-five per cent of Bank of Valletta is privately owned, with the government’s 25 per cent stake making it the largest single shareholder.

Malta Financial Services Authority chairman Joseph Bannister told The Times that the MFSA had informed Mr Bonello it could only investigate his complaint once he had filed a formal complaint with Bank of Valletta.

Prof Bannister declined to enter into the specifics of the case, saying the MFSA did not comment on the relationships between financial institutions and their clients.

Mr Bonello remained unconvinced by the MFSA’s arguments.

He accused the regulator of “acting like the three wise monkeys, trying to avoid any investigation unless it has to”.

Bank of Valletta’s actions were anti-democratic as well as an abuse of its dominant market position, Mr Bonello insisted, as he called on the regulator to investigate the matter of its own accord.

Mr Bonello was similarly unimpressed by the government’s response to his plea for intervention.

As the bank’s single largest shareholder, the government could “take the appropriate action at any time by a simple letter,” Mr Bonello argued.

He drew parallels with a 1977 incident in which he was involved, when Bank of Valletta and Mid-Med Bank management had called in employees’ home loans “in retribution for the partial industrial action we were taking”.

“I wanted to believe that Malta had matured in political stature and democratic credentials... but it appears such measures are being revived... in the new millennium,” Mr Bonello wrote in a letter to Dr Gonzi.

An aggrieved Mr Bonello has said that he will take legal action unless the bank reverses its decision by July 1.

“This sort of thing is unacceptable in a democratic society... but it’s not going to distract me from my work advising my clients.

“And I’m determined not to let this incident detract from my objectivity when dealing with Bank of Valletta issues.”