Bank of Valletta will be holding its Annual General Meeting remotely for a third successive year next month, with its chairman saying that it is too late in the day to organise a face-to-face meeting with shareholders.
BOV chairman Gordon Cordina told shareholder and political campaigner Arnold Cassola that preparations for the AGM had been ongoing for “months” and that the “cut-off decision point on the form of the meeting was prior to the announcement of removal of COVID measures.”
Cassola had asked Cordina to revise the AGM to allow shareholders to speak to bank directors in person, following concerns about financial mismanagement that culminated in news of a €182 million settlement the bank reached in an Italian court case this week.
The decision to hold the AGM remotely means shareholders who wish to grill bank directors about that settlement and other concerns will only be able to do so if they submit their questions beforehand, in writing, with no opportunity for follow-up.
BOV will hold its 2022 AGM on June 2. It first made that date public in a company announcement issued on March 25.
Capacity limits for indoor events were removed early in April, though Health Minister Chris Fearne had first announced that decision on February 24, one month before BOV communicated its AGM plans.
In an email exchange with Cassola that the political candidate made public, Cordina wrote that the bank would be meeting “media, stockbrokers and shareholders representatives” in the coming days.
Cordina, who only joined the bank as its chairman in late 2020, also offered to meet with Cassola to assuage his concerns.
But Cassola was not having it, telling the bank chairman that the bank had duped shareholders and the media and that a remote AGM would allow it to enact a “divide and conquer” strategy to stunt shareholder objections.
“The bank cannot get away with answering questions in writing. Present and past chairmen and directors have to be physically present in a public and open meeting,” Cassola argued.
BOV shareholders have grown increasingly upset at the way in which BOV – which is 25% owned by the Maltese government – has been run in recent years.
The bank’s share price has been sliding for years with shareholders receiving no dividend between 2018 and January of this year, when management approved an interim dividend of €0.0264 per share. It again advised no dividend when it reported 2021 results in March.
Earlier this week, the bank announced that it would be paying €182 million to shareholders of bankrupt shipping giant Deiulemar, as part of an out-of-court settlement following a court case filed in Italy against the bank. BOV had earmarked roughly €80 million to settle the litigation, meaning the settlement will land a €100 million blow to its balance sheet.
When announcing its 2021 results on March 25, the bank had said that it believed it would win the Deiulemar case and did not need to reserve any additional capital to settle the matter.
The bank reported a €22 million profit before tax in the first three months of 2022. It has said that it will be replacing its CEO Rick Hunkin, who reportedly splashed out on consultants, following "mutual agreement". Hunkin - the first external chief executive in BOV's history - joined the bank in late 2019.
Credit rating agency Fitch recently downgraded the bank's rating to BBB-.
In his email to Cordina, Cassola said that he and other shareholders wanted answers and explanations of three key issues:
- Due diligence proceedings done in relation to the 2009 decision to open a Deiulemar trust
- Misleading statements to shareholders – “taking us all for a ride” – since 2014
- The fact that shareholders would foot the €182 million litigation bill, while bank directors from 2009 onwards “did not forfeit one cent of their emoluments”.
According to the bank’s rules, executive directors can have their remuneration reversed for up to seven years from their date of assessment in cases related to a failure of risk management, among other things.
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