November 2 2003
The BICAL saga in chronological order
An overview of some of the relevant dates and events
1962 – Brothers Henry and Cecil Pace open the BICAL bank.
They are the shareholders and directors of innumerable companies
spanning the whole economic spectrum – shipping, hotels,
finance, manufacturing and motor vehicles. Cecil Pace is one of
Malta’s foremost entrepreneurs. Together with his brother,
the BICAL bank and its associated companies employ 3,300 workers.
Even Dom Mintoff, Labour Prime Minister between 1955 and 1958,
and later from 1971 to 1984, acknowledges Cecil Pace’s status.
In the late fifties, with Cecil Pace on tow as a business representative,
Mintoff would introduce Pace as a "successful industrialist,"
when on trips abroad to promote Malta.
1970 - Central Bank (CB) inspectors identify BICAL as being in
a bad situation and exposed to great risk due to a shortage of
liquidity, excessive loans beyond the bank’s means. The inspectors
contend that these loans were concentrated on a small number of
industries in which the president and one of the directors of
BICAL had major interests, a practice not in conformity with banking
practice. The CB report is corroborated by accountants Cooper
Brothers Ltd, who suggest the appointment of a controller to regulate
the bank’s dealings.
1971 - Labour is returned to power. Finance and Customs Minister
Guze Abela gives orders for the immediate examination of BICAL
affairs by Central Bank inspectors.
November 1972 – Cecil Pace gets to know through Hambros Bank
that the credit limit in BICAL’s account of 360,000 pounds
has been exceeded. Baffled, Cecil Pace calls for one of his managers:
Lawrence Cachia Zammit, brother of former PN Health Minister Alexander
‘Sandy’ Cachia Zammit, and also treasurer of the Nationalist
party. He admits to having made unrecorded foreign transactions
of up to 360,000 pounds sterling, which were allegedly made to
pay for printing equipment purchased by the Nationalist party
apart from other personal payments made by Cachia Zammit in the
expensive pastime of keeping racehorses. The bank appears to have
never been repaid by the Nationalist party for the disbursements
of foreign payments made through the Hambros bank. Cachia Zammit
had in fact written a letter confirming the discrepancy of funds,
and offering to make up for the missing funds by personally transferring
property to Cecil Pace’s companies.
November 20, 1972 - Cecil Pace receives a telephone call from
Robert (Bobbie) Stivala, Guze Abela’s private secretary.
At 9.45 pm, Cecil Pace, accompanied by his lawyer Albert Ganado,
drove to the Finance Ministry. The writing was on the wall, and
Bobbie Stivala did all the talking: "From this time on, your
bank is no more, I suggest you co-operate fully with the Central
Bank." In the following days, BICAL encounters a run on its
reserves. Guze Abela, Finance Minster, is one of the many depositors
who make sure they withdrew all their monies from BICAL before
the appointment of a CB controller to take over the bank –
according to Cecil Pace the amount is Lm5,000, certainly no coincidence.
November 25, 1972 - A DOI statement announces the bank is to be
closed for a time to allow for talks with the Finance Ministry.
Central Bank manager RJA Earland appointed Controller.
November 28, 1972 – Karmenu Mifsud Bonnici is appointed BICAL
controller to take over the bank’s and its associated companies’
assets and sell off as much as is needed to clear all the bank’s
and its companies’ debts and liabilities. With his bank under
control by Mifsud Bonnici, Mintoff’s right-hand man, Cecil
Pace learns much about the motivations behind the closure of his
bank. He cannot understand why the evident surplus of assets over
liabilities threatens the closure of his bank.
January, 1973 - Two messengers bring home the reality behind the
closure of the bank: at the newly-opened Excelsior Hotel, Justice
Minister Anton Buttigieg candidly asks Cecil Pace whether he would
consider taking on Mintoff as a business partner. Buttigieg suggests
to Cecil Pace he transfer part of the bank that was later to be
closed down, to Mintoff’s nominees. In return Cecil Pace
would have the possibility to open new branches and to take over
Cecil Pace had already been asked to accept to become deputy leader
of the Labour party by Mintoff. An employer of 3,000, and a popular
personality, Pace had the ability to garner great support for
the MLP. "Not being politically minded, I rejected the offer.
Soon I was approached again, this time with the proposal to sign
away half my equities to nominees and be rewarded with ‘choicy’
contracts for my companies whilst my bank would be handling Government
accounts and permits to open branches all over the island,"
January 5, 1973 - KMB asks Cecil Pace to sign the deal with Mintoff,
or else face the consequences. The next day on 6 January 1973,
Cecil Pace waited for the police to arrive, to be taken to Kordin.
October, 1977 – Following four years of imprisonment and
house arrest, Cecil and Henry Pace are convicted for misappropriation,
fraud and forgery. Cecil is sentenced to 14 years, and his brother
9. According to a Court registrar overhearing a telephone conversation
between the presiding Judge and Dom Mintoff, it is Mintoff who
gives the blessing for the maximum sentence allowed.
1985 – Cecil Pace is released from prison. He now has to
face Karmenu Mifsud Bonnici then Prime Minister of Malta, appointed
by Dom Mintoff himself. Cecil and Henry Pace initiate a series
of legal proceedings into the mishandling of BICAL and its companies
and the apparent reticence of Controllers to pay off the depositors
at the BICAL bank.
November, 1995 – Parliament passes a law which grants immunity
from prosecution to the BICAL Controllers, which stops the Pace
court actions from being heard in Court and transferred the cases
instead to a tribunal presided over by a Finance Ministry-appointed
2003 – Fresh new allegations into the political intrigue
behind the closure of BICAL are revealed in MaltaToday. Around
20 per cent of BICAL depositors remain to be paid, but the bank
is still under control. BICAL Controllers are revealed to have
squandered hundreds of thousands in BICAL monies to pay for their
services, estimated to amount to over Lm2 million in 30 years.
Cecil Pace, now 73, is still fighting for the recovery of BICAL
monies to be given to the rightful depositors and the release
of his companies from control.