A 35-year-old saga which has left unresolved the liquidation of the BICAL bank and its related companies is currently the subject of a dispute between BICAL owner Cecil Pace and Italian lawyer Michele Martone – both laying claim to the once-ownership of the Grand Hotel Excelsior, which has since been sold to new owners.
Both have made claims to the settlement of dues in their favour once controllership of the BICAL companies is lifted and returned to Cecil Pace, but the feud is rooted in a labyrinthine maze of claims and counter-claims.
Yesterday Cecil Pace said Martone’s claims, which the Italian has taken to the Prime Minister through the Italian ambassador, could not be substantiated because Pace says the Excelsior’s former owners declared in an affidavit, seen by this newspaper, that he was transferred the shares of the company which owned the hotel, the Malta and Europe Hotels Ltd (MEH).
Pace is now presenting the affidavits as evidence in a case he filed before the European Court of Human Rights in Strasbourg.
Pace’s BICAL bank was taken under government controllership back in 1972 when the bank’s licence was suspended. With it, all its assets and those of its related companies – property, a car retail business, hotels and ships – were transferred to the state controller with the intention of selling off enough assets to pay off debts, loans and liabilities, and then releasing the assets back to owner Cecil Pace.
Thirty-five years later, Pace still awaits the release of what remains of his business empire – a story unto itself of how assets worth millions were squandered by government controllers just by selling them off at giveaway prices.
The Excelsior hotel was owned by Italians Antonio Ghidoli and his wife Nada delle Piane, until they fell short of finance to complete the hotel. Eventually, Pace secured the hotel when his company Malta Industrial Development Corporation (MIDC) took over the loan debt which the Ghidolis’ owed to GUS Export International, their financiers at the time. Through the company Pabros, Pace rented out the hotel to the Ghidolis since MIDC was the owner of the hypothec on the Excelsior.
Michele Martone, who claims to have been the Ghidolis’ legal advisor, contends Ghidoli sold him his majority shareholding on 20 September 1972, shortly after the BICAL collapse. The share transfer certificates exist, but these were only certified as true copies much later, in 1987. As for the transfer of Delle Piane’s shares, no transferee is indicated on the share transfers, and there are no witnesses to the signature – hence the controversy over the Martone shares.
Pace claims Martone was never the Ghidolis’ lawyer, a claim corroborated in part by an affidavit by Nada delle Piane. He also claims the share certificates were forged.
In the affidavit seen by this newspaper, which Nade delle Piane signed on 7 January 2003, she declares that both her and her husband sold all the MEH shares to Cecil Pace when their company ran out of enough finance to complete the Excelsior’s construction.
She also states that one month after the share transfer, when the BICAL bank’s licence was suspended, Michele Martone – described by Nada delle Piane as a lawyer of certain creditors – “attempted to pressure my husband into paying his debts [due to Martone’s clients]” and how she “always refused the requests of Mr Michele Martone to sell our shares to him as well”.
Her son Alessandro also claims in an affidavit of 8 May 2002, also seen by this newspaper, that Martone presented to him documents which he “did not recognise as authentic”, and that his mother, who refused to meet Martone, later told him “how her holdings in property relative to the Malta & Europe Hotels had been ceded to Mr Cecil Pace.”
Controllers’ deeds
One of the reasons why such claims are still unresolved may be due to so-called guarantees given by the BICAL controllers.
Among these were Karmenu Mifsud Bonnici, the former Labour prime minister who between 1973 and 1985 was the Central Bank’s controller responsible for selling off enough assets to clear the BICAL group of any liabilities.
KMB’s role in the Excelsior affair appears to have been a simple note in which he stated he had no objections to the transfer of ownership from Ghidoli to Martone, given to Martone’s lawyer Giovanni Bonello on 12 November 1974.
It is unclear as to what sort of proof Mifsud Bonnici had as to the validity of the share transfer. His controllership of the BICAL assets is blemished by his mechanically bureaucratic impulse to sell off BICAL assets at giveaway prices to ensure their quick sale. Pace, despite being the owner of the BICAL group, was unable to assert any control of how his assets were managed while these remained under government controllership. Such was the careless manner in which Mifsud Bonnici rid himself of the BICAL assets, that in one incident he gave away the Comino Hotel, valued at Lm1.5 million, gratis to Comino landlord John Gaul so that the Lm12,000 yearly rent would no longer be paid.
So the legal incapacity of Pace at this time resulted in a strange settlement of matters: as controller, Karmenu Mifsud Bonnici was also the legal representative of all BICAL companies. In 1973, KMB instituted a lawsuit to rescind the lease which Pabros owned on the Excelsior (the rent agreement between the Ghidolis and MIDC, through the company Pabros), and give it back to the Malta and Europe Hotels Ltd – the intention being that once MEH is returned to its owner, allegedly Martone in KMB’s eyes, it would also own the lease of the land.
As both MEH and Pabros fell under the government controllership, KMB appointed George Abela as the lawyer for the plaintiff MEH, while he – as legal representative of Pabros – admitted a facile ‘guilty’ to the claims brought by MEH.
Unsettled
Cecil Pace claims Michele Martone had forged the share transfers from Ghidoli. In 1996 he filed a police report against Martone claiming the Italian lawyer had tampered with the contract of transfers. What was not established is whether Martone had actually forged the transfer of ownership of the MEH while Pace was under house arrest after the collapse of his bank. Being a criminal case, there was not enough evidence to prove beyond reasonable doubt that certain wrongdoings took place. The court in fact noted that “even though the version forwarded by the prosecution could be true, the facts, as presented by Martone, were sufficient to doubt whether the alleged wrongdoings took place or not,” and Martone was acquitted of all accusations.
Last year, the newly appointed Italian ambassador to Malta, Paolo Andrea Trabalza, accompanied Martone for a meeting with Prime Minister Lawrence Gonzi to discuss the ownership of the Excelsior hotel. Martone claims the Excelsior was sold in 1991 despite his efforts and those of his lawyer (today European Court of Human Rights judge) Giovanni Bonello, saying they were “surrounded, almost threatened” and asked to give in and permit the sale.
On his part, Cecil Pace has forwarded his affidavits as evidence in the court case he has filed before the European Court of Human Rights in Strasbourg.