Bank chairman appointment

I refer to the interview with Bank of Valletta chairman Roderick Chalmers (January 3) and particularly to the reference to the shareholder's judicial protest.

Firstly, may I point out that my judicial complaint refers to the office of chairman and not to the particular individual who occupies that position.

I would like to state that the appointment of Mr Chalmers to head BoV was an excellent choice which could not have come at a better time for shareholders in view of the proposed divestment of the government's 25 per cent minority shareholding (final privatisation) in this institution.

I would however like to briefly comment on Mr Chalmers' inaccurate statement with regard to my judicial protest against Bank of Valletta plc. He must have either misinterpreted its contents or may have chosen to ignore the real point at issue.

My argument is based on the facts:

(i) The chairman is nominated by the government of the day, who has a 25.23 per cent minority shareholding interest in BoV.

(ii) This in fact means that the chairman is imposed on the majority shareholders by a minority shareholder, according to the terms and conditions of BoV's privatisation agreement which is not being contested and may be perfectly legitimate.

(iii) This also implies that the chairman is nominated (imposed) on the board of directors who, in normal circumstances, elect their chairman to reflect a wide representation of the majority shareholders. By the same implication, a privileged representation is thus created on the board of directors (whether the chairman takes advantage of this privilege or not is another matter which is not at issue).

(iv) Any acquirer of shares in the bank is subject to the above. However, this certainly does not mean that "there is no question of imposition" as Mr Chalmers seemed to imply but quite the contrary this emphasises the fact that the question of imposition has to be accepted by any purchaser of shares in BoV and this in terms of the rules and regulations of the company.

(v) As things stand, therefore, the chairman, who is also one of the directors nominated to represent the government's shareholding interest, is one and the same person, which clearly reflects conflict of interest (taking into account that no chairman is above human failings).

Mr Chalmers' statement that the moment the chairman is nominated by the government (who is concurrently also nominated director to represent the government's interest), he represents all shareholders and does not take any instructions from the government who nominates him is both a subjective and hypothetical argument.

The fact that the anomalous position of the chairman at BoV gives rise to conflict of interest is undeniable and should be rectified or challenged, independently of the present chairman's integrity and code of conduct.

Finally, I appreciate that Mr Chalmers has chosen to defend the status quo, however, the facts are indisputable.