BOV loses €370m Deiulemar case in Italy, will appeal decision
Bank of Valletta said on Tuesday that it has lost the Deiulemar case, with an Italian court ordering it to pay €370m. The bank said it will be appealing the decision.
The bank said that over €360m had been put aside in 2018 as a precautionary security for this situation.
The case began after liquidators of the Deiulemar shipping company, together with representatives of 13,000 Italian bondholders filed a court application against BOV after they lost their life-savings. €363m was allegedly held in trusts at BOV by owners of the now defunct shipping giant, Deiulemar. The company went bankrupt in 2012. The shipping line's owners had allegedly been engaged in asset stripping since at least 2005, through the setting up of numerous companies which were often based overseas.
In a statement on Tuesday, Bank of Valletta referred to past company announcements whereby the bank had informed the market that legal proceedings had been instituted against it before an Italian court. “The bank has today been informed that the Tribunal of Torre Annunziata has delivered its decision against the bank in aggregate an amount of €370m including legal interests and costs.
In line with advice received from legal counsel and consistent with several legal opinions as to the underlying strength of our case, the bank shall be immediately appealing this decision.”
BOV said that under these proceedings the bank was being requested to pay an amount equivalent to the value of the shares of a company which had been settled on trust with the Bank as Trustee, and which value the plaintiffs were alleging amounts to €363m. “Bank of Valletta disputed this claim as shares held were deemed worthless following the bankruptcy of Deiulemar Group. The bank held no other assets on behalf of the Deiulemar Group. Pending such appeal, the bank would like to assure the market that it is well capitalised and its operations will not be adversely impacted by this decision.”
“In 2018, the bank had placed in excess of €363m in the hands of an independent entity, following an order from the Tribunal of Torre Annunziata as precautionary security. No new payment will be made as a result of today’s decision.”