National Bank Saga •
February 22 2004
Former Nationalist MP says Mintoff never held a gun to the shareholders’ heads
- The shadow of Barclays behind the National Bank crisis
- Former PN top brass offer conflicting views on the role of the Opposition
A former Nationalist member of parliament told MaltaToday Mintoff never held a gun to their heads, describing the shareholders as having been duped by Mintoff’s threats to remove their limited liability.
The evaluation of the National Bank of Malta saga by former MPs and other close members of the PN secretariat has revealed the tension that was apparent within the Opposition’s echelons throughout the National Bank of Malta crisis. Refusing to be named, former politicians and party activists have presented opposing claims on the National Bank saga, as seen through the eyes of those who watched from the Opposition benches.
“The facts of the case were clear. Mintoff never held a gun to anybody’s head and it was unconstitutional from the start for him to threaten the shareholders claiming he could have removed the limited liability of the National Bank,” the former Nationalist MP said.
“So if the directors thought that this threat was real, it was their problem. It was the shareholders who signed at the will of the directors. They were certainly cowards, because in no way could the government take away their limited liability.
“My relatives also owned shares in the National Bank, and they phoned me from abroad to complain of the way the management had dealt with the situation. They never signed over their shares.”
New revelations on what happened in the crucial December month that was to see the National Bank of Malta taken over by Mintoff’s government, point towards the friendship between Dom Mintoff and Barclays Bank Malta director Louis Galea. “There was no doubt that Barclays Bank Malta were certainly on good terms with Mintoff. Louis Galea, Barclays’ factotum in Malta, was a good friend of Mintoff’s and would often be seen in Parliament with him,” the former MP said.
The former MP said there could have been much to suggest that that friendship was a factor behind the pressure exerted on the National Bank of Malta shareholders to transfer their shares to the government.
The enigmatic role of Louis Galea in the National Bank of Malta crisis however paints a schizophrenic picture of the events as they unfolded in the December week when the National Bank was hit by a run on its cash reserves.
According to Adrian Busietta, a director of the National Bank of Malta, early in the morning of Monday, 10 December, at 7.45 am, he received a phone call from Louis Galea. Barclays Bank was then the main rival of the National Bank. Louis Galea told Busietta the following words:
“Adrian, do you have some small trouble, because they phoned me up from London with some information.”
Busietta said Galea was offering the board of directors at the National Bank to help the bank: “He said he could also offer standby finance from London because they had authorised him to back us up. I thanked him and said I would pass on his kind offer to the board of directors, but told him that I did not think there was any urgent need at the moment. And so I did – but what happened later led to no possibility of liaison with Barclays. Here I must state that I felt perplexed by this approach from Mr Galea.”
It was in fact later that evening, when a National Bank of Malta delegation visited the office of the Attorney General Edgar Mizzi, that Galea’s role was disclosed, as Busietta’s affidavit read:
“We asked him to arrange a meeting with Louis Galea who that same morning had offered us help. Mizzi told Dr Attard Montalto (an NBM director) – according to the latter: ‘Dak digà belaghha l-pillola!” (he has already swallowed the pill), and that Galea was at that very moment with Mintoff at Castille. Some of us thought that these words meant that Mintoff was also going to take over Barclays Bank.”
According to one of the confidantes of the late Gorg Borg Olivier, leader of the Opposition throughout the National Bank of Malta crisis in December 1973, there were complaints about the lack of support the party had shown towards the shareholders.
“I remember Dr Mario Felice expressing his opinion and considerations in Parliament as shadow Minister of Finance. I remember however that although certain shareholders and directors came over to the party to seek support, the PN never took any concrete steps to help them. I don’t know why.
“Some said Felice had not ‘helped’ the shareholders enough in Parliament that evening, although he did support them in certain ways. I suppose that Felice had other commercial interest at heart throughout his political career and may have not wanted Mintoff to turn on him one day as well. After all, there was the time when Felice had acted as messenger for Mintoff to deliver a letter to the American government for him, on matters relating to the country.”
Another former Nationalist member of parliament said there had been little or no contact between the Nationalist Party and the shareholders, disagreeing with claims that Borg Olivier was not happy with the performance of the Opposition throughout the reading of the National and Tagliaferro Banks (temporary provision) Act – the law which transferred all business of the National Bank of Malta to the government.
“Borg Olivier never understood a thing. If he felt annoyed by what happened in Parliament that evening he could have gone and braved the winds himself. The fact was that Borg Olivier was so lazy he couldn’t even think of getting angry about the situation,” one former MP said.