More than three decades ago, when the then National Bank of Malta was facing a run down on its deposits, it was the sheer determination of Dom Mintoff which saved the bank by the injection of public funding. For this courageous act in the interest of the Maltese society, he incurred the wrath of various reactionary forces who unjustly labelled him a communist, and a dictator (even though he was democratically elected). With the nationalization of the National Bank of Malta, turning it into the Bank of Valletta, hundreds of jobs were saved, and so were the savings of thousands of Maltese depositors. The Bank of Valletta continued to prosper and to become what it is today - a much larger local bank, with several overseas branches. The NBM shareholders were the unfortunate party in this saga, and till this day, they are still seeking justice, and stake a claim to their investments, even though financial experts had evaluated their shares to be worthless.
At that time, the run down on the NBM deposits was escalating day by day, and in bounds and leaps. It was thus obvious, that although the bank still held a certain amount of liquidity, however it was calculated that within a few days, it would have been in dire straits. The value of the bank’s shares was termed to be practically worthless in such a situation (similar to current global financial situations in which much bigger financial institutions has collapsed, and their shares are now not even worth the paper and ink on which they were printed). However, some of the N.B.M. shareholders preferred to hold on to their shares even though the bank was fast approaching liquidation, and had it not been Dom Mintoff’s acumen, all could have been lost.
In the current financial turmoil, several much larger institutions have sustained the misfortune of a run down by depositors, and in cases where there was no government intervention, they folded down, and their shares are presently worthless. To name but a few, Northern Rock (U.K.), and Lehman Brothers Holdings (U.S.A.), are just two such good examples, whereby the former from private company has become a public company, and the later without government intervention, they are now a thing of the past.
Rather than unjustly blaming Dom Mintoff for their misfortune, the existing ex-shareholders should consolidate their efforts and act on three important steps.
Firstly, they should engage investigators to establish how this run down originated. As an aid on this, it would be worthwhile to remember, that in the most difficult times, and times of crisis, Dom Mintoff encountered hurdles by the opposition of that day rather than assistance. It was not the first time that an artificial scarcity of certain essential items or food stuff was created just by spreading false rumours that that particular item was running out of availability. It was surely not Dom Mintoff who created these false rumours to destabilize his own government. To try to attribute this to the ex-Prime Minister is tantamount to illogical reasoning.
Secondly, by the utilization of modern financial software and financial accounting instruments, ex-shareholders should try to prove that the National Bank of Malta was really capable of withstanding the onslaught of its impeding downfall on its own i.e. without third parties’ assistance or government’s intervention. If they really can do this, then I just hope that they can pass this expertise to the current much larger foreign institutions who are on the brink of bankruptcy so that they too would survive.
Thirdly, once they establish that their now defunct Bank (NBM) could have survived the calamity of a complete run down, then I respectfully suggest that they should seek redress through external powerful courts of jurisdiction such as the Court of Human Rights, or the European Commission. Seeking justice through our local jurisdiction is just a waste of time, and money, because as every Maltese citizen knows, our Law Courts are inefficient, and too cumbersome.
To save face and retain some level of esteem, the local Juridical Authorities should make haste whilst the sun shines or else they might become the scapegoat for the ills befallen the ex-shareholders. Moreover, justice delayed is justice denied. Several parallels presently exist in the present world’s financial turmoil which replicates and simulates the events which led to the NBM run down. These can be taken in consideration to reach a justifiable decree or fair sentencing. If the ex-shareholders are to be compensated, the Maltese Government has obtained millions in taxes out of the present Bank of Valletta, most of which during the current government’s tenure and if these do not suffice, than Europe might be compelled to extend its financial muscle as we are in it. On the other hand, if it is to be decided that these ex-shareholders do not deserve to be compensated, so be it. Let judgment be done though the heavens fall. This would be better than crying over spilt milk or shedding crocodile tears. I am sure that there is quite a number of Maltese who at one time or another have lost their shareholding in foreign companies such as Lehman Brothers, or sustained substantial devaluation of their shareholding from their investments in Companies listed even in our local Stock Exchange. This is not the end of the world.
When all is considered, I cannot find any blame in Dom Mintoff’s handling of this NBM saga, and I have only praise for this great ex-leader. The recent events of global financial disasters have proved Dom Mintoff right once more - that government regulations and interventions are essential to maintain security and peace of mind rather than motivation based solely on human greed and selfishness. Failure of the U.S. government to intervene when the first alarms of financial disaster were raised by the faltering Lehman brothers culminated in a domino affect necessitating an injection of billions of dollars to prevent financial collapse. Nobody dared to call President Bush a communist due to this intervention, and Dom Mintoff deserves likewise, he is thus still considered our saviour. We are in fact still reaping the fruits of his labours, with the so called current trend of privatisation of public companies to make up for our governmental financial mismanagement, we are actually selling the family’s silver. I just wonder whether there will be another Mintoff to take us through the present global recession, or whether we are in for more taxes, and water and electricity rates hikes (in spite of much cheaper oil). God save us all.
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