One of Malta’s longest ever liquidation sagas is claimed to be at the end of its gruelling process.
Over 30 years since its banking licence was suspended, the liquidation of the BICAL Bank and its associated companies, and the distribution of what’s left in millions of assets seized by the State, is now “at an advanced stage”, the Ministry of Finance has told MaltaToday.
The bank’s licence was suspended in 1973 and put under government administration – its goal was to sell off as many assets as required to pay off the company’s debts.
But owner Cecil Pace fears the worst after three decades of what he describes as ‘mismanagement’ by government appointed controllers – whose bills are directly charged to the bank’s and its companies’ funds. Pace says his companies were dismembered, assets sold off at giveaway prices to preferred buyers back in the 1970s and 1980s, and the liquidation process deliberately prolonged to “fatten pockets”.
But before the remnants of the BICAL empire return to Pace, the liquidation of all its associated companies will have to be finalised. There are 25 companies which are in dissolution, and for which the Controller must finalise a list of recognised creditors which is expected to be published in the near future.
One of the main bones of contention concerns the ownership of shares in the company Malta & Europe Hotels Ltd, which once owned the Grand Hotel Excelsior in Floriana.
The ministry said the Controller has determined the claims against the company and the objections made to the scheme of distribution. But the Controlled Companies Appeals Board is at present also considering two objections to the scheme of distribution.
Cecil Pace’s claim amounts to Lm180,000 in capital and a further Lm943,200 in interest. But another pretender, Italian lawyer Michele Martone and his son Massimiliano have also advanced a claim of Lm1,000,000. According to the register of ordinary shareholders, Martone owns 9,212 shares in the company, transferred from Joseph Zammit back in October 1974. The transfer of shares was finally confirmed by a Court of Appeal in 2004, following a retrial.
But the Controller’s report also states the Lm1 million claim by Martone “cannot be brought forward against Malta & Europe Hotels at this stage, and is, in any event, unfounded.”
It states that no distribution can be made before the case is either withdrawn or dismissed by the Courts “as the amount claimed makes it impracticable to make a provision… since the case is now outside the liquidator’s and Controller’s remit.”
The finance ministry said the Controller is “considerably hampered” by “vexatious proceedings” filed in Court in relation to the liquidation process of the Malta and Europe Hotels Ltd.
“Garnishee orders have been unnecessarily issued, and naturally the pending of such claims in Court will provoke unfortunate delay,” the spokesperson said.
The Malta & Hotels Ltd is still owed an outstanding amount from the sale of the Grand Hotel Excelsior. The distribution, according to the scheme determined by the Controller, will first provide against the liquidator’s and controller’s fees and expenses, and then against the claims made by Cecil Pace. After these claims are settled, the other settlements to creditors and preference shareholders will take place, together with the distribution of dividends.

mvella@mediatoday.com.mt