Bank of Valletta (BOV) has been ordered by an Italian court to forfeit a €363 million precautionary security, plus court and legal fees, in a claim filed on behalf of 13,000 bondholders of Deiulemar group.
The news came via a court decision published on Tuesday by an Italian tribunal in Torre d’Annunziata, a province of Naples. In a statement reacting to the decision, BOV said it would be appealing the ruling.
In 2018, the amount had already been frozen after an appeal by BOV against a precautionary warrant freezing the large sum had been denied.
The claim against Malta’s most important bank was filed by liquidators of the Deiulemar Group, and representatives of 13,000 Italian bondholders who lost their live savings due to a scheme that was found to be fraudulent, dating back to 2009.
The €363 million claim stems from a trust opened by the owners of the now collapsed shipping giant Deiulemar. BOV had taken over this trust in 2009, while Deiulemar filed for bankruptcy in 2012, with losses of more than €800 million on its books. This led to seven people linked to the shipping giant being jailed.
Under the Torre Annunziata tribunal proceedings, the €363 million BOV was being requested to pay is equivalent to the value of the Deiulemar shares which had been settled on trust, with the bank as trustee. BOV continues to dispute the valuation of these shares, saying these were worthless following the bankruptcy of Deiulemar Group.
In the liquidator’s claim against BOV, the bank was accused of allowing Deiulemar owners to set up three trusts in 2009 – Capital, Giano and Gilda, which they accuse the owners of illegally funnelling millions into.
In 2020, BOV had offered a €50 million out-of-court settlement to the bondholders, in return for the claim by liquidators being dropped, however this was rejected.
In its statement, BOV said:
“Pending such appeal, the Bank would like to assure the market that it is well capitalized and its operations will not be adversely impacted by this decision.”
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