A group of shareholders in the former National Bank of Malta are claiming they are owed €1.4 billion in compensation.

A court this year awarded the shareholders €111 million in damages, however both the shareholders and the government appealed the decision.

The bank was taken over by the government and its assets and debts transferred to Bank of Valletta in 1974.

In their appeal, a sizeable group of shareholders argued that the €111 million in compensation does not go far enough.

They argued that the compensation should include the dividends paid out by Bank of Valletta from 1974 to date, as well as legal interest, taking the compensation up to €1.4 billion.

Another group of shareholders have argued that the court’s decision to apportion the €111 million equally among all shareholders would create a new injustice, as  each shareholder would end up receiving an equal sum irrespective of the extent of their shareholding in the National Bank.

Court battle going on since 1992

In its own appeal filed last month, the government said its intervention to save the National Bank by setting up another bank to handle it was needed to avert an economic disaster, the loss of depositors’ funds and jobs. 

The government said that while the courts had recognised this need, the court’s sentences still adopted a “negative vision” and imposed a penalty on current public finances for having averted an economic disaster in 1973, as if what had been done was wrong.

The appeals are the latest development in a court battle that has been going on since 1992.

The cases filed in 1992 by a total of 82 original applicants, revolved around the saga that kicked off in December 1973 when then Prime Minister Dom Mintoff updated parliament about the situation at the National Bank.

He also spoke about plans to take over the bank, explaining that way forward had been suggested by a representative of the same bank. 

A week later, on December 12, 1973, the administration of the National Bank and the Tagliaferro Bank was “temporarily” taken over by an administrative council.

In March 1974, the assets and debts of the National Bank were transferred to Bank of Valletta Limited.

All 82 applicants were among shareholders who opted not to sign an agreement to transfer their shares to the government without payment.