After the BoV EGM

Shareholders with whom I've chatted are disgruntled that the Bank of Valletta directors have increased the amount set aside for their Honoraria by €100,000 but will not be paying out an interim dividend in September despite registering €74 million in profit.

These shareholders also see the increase to a three year term of the Board of Directors as affording the shareholders less say on the board members, as for example voting them out at year's end for not recommending an interim dividend despite such a positive registered profit.

The 'continuity argument'' is fallacious as normally only a few changes take place, mostly the appointing of the chairman and director by the government which retains a minority stake in BoV and directors, known as stalwarts of the party in government through lobbying of small shareholders who put their party affiliations before other valuations.

We seem to be sliding at an ever faster rate to the pre 1987 banking model.

Commercial transactions should not be undertaken to favour one project over another for reasons dictated by the administration in power which are not as secure an existing commercial venture as Tigne Point.

It is known that banks have a limit of the proportion of portfolio they can allocate to property loans. By selling its stake in Tigne Point (MIDI), BoV might be freer to for example finance a new hotel to be built on public land granted at a very low price overlooking a narrow bay near a year round established entertainment area, unlike Mellieha Bay and Bugibba!

Finally by removing shareholders' funds from reserves and capitalising them as shares and getting the go ahead to more than double the existing shareholding BoV will increase its top echelons with more fat pay packets as well as becoming more attractive as a takeover prize by some Arab, Chinese or whatever fat pocket investor...leading to the ousting of the original individual small shareholders through the Stock Exchange 'squeezing out' clause.

This EGM showed up the worst side of ramming through changes on the mostly unsuspecting shareholders. C. Grech Tas-Sliema