John Dalli EU Commissioner sold the Mid-Med Bank for a pittance. This national asset had a history going back as far as 1882. Initially it was known as the Anglo Egyptian Bank. In the 1950's it was known as Barclays Bank D.C.O. and it was nationalised by a Malta Labour Party administration in 1975. During its nationalised period it grew into the largest bank on the Maltese islands controlling more than 50% of the economy.
After winning the 1998 general election the Nationalist Party started to implement its privatisation programme. John Dalli was appointed Minister of Finance and Economy. A privatisation had to be implemented because of the financial mess they had left the country in when they were in government prior to the 1996 election.
During the administration of 1992-1996 John Dalli was Minister of Finance. The 1996 election was called early (the Nationalist Party administration had another year left to govern) because it was realised that the country's financial situation had gone out of control. The deficit and national debt hit record levels.
The Prime Minister at the time (Dr. Eddie Fenech Adami) in an interview with Godfrey Grima a prominent newspaper reporter and journalist, confirmed that when he (Dr. Eddie Fenech Adami) was informed of the country's financial situation he nearly had a heart attack. That is how bad the country's financial situation was.
However, the Malta Labour Party administration only lasted eighteen (18) months. While in opposition the Nationalist Party did their utmost to bring down the MLP administration lead by Dr. Alfred Sant. The MLP only had a majority of one seat in the House of Representatives. They should have had a three seats majority but the gerrymandering of the electoral districts done by the Nationalist Party prior to the election restricted the parliamentary seats majority to one seat.
The Nationalist Party secretary Joe Saliba in his address to the party's annual general conference confirmed this after winning the 1998 general election stating "we are a confident political party so much so that in eighteen (18) months we succeeded in bringing down the administration of the Malta Labour Party" (MLP). In response to his statement the audience stood and applauded.
During the Nationalist Party administration of 1987-1992, in preparation to privatisation, 33% national shareholding was sold to the general public and the bank was listed on the Malta stock exchange. That was an acceptable procedure and a benefit to the general public.
The second part of the bank's privatisation was handled in a different and unacceptable way. Although John Dalli was the Minister of Finance and Economy the nationalised banks were the responsibility of Profs. Josef Bonnici who was Minister for Economic Services. There was a lot of public debate and concern regarding the next privatisation step. The main concern was that this national asset controlled more than 50% of the economy. Passing it into private hands raised a lot of concern. There was also the price tag. Putting a price on such a strategic asset raised many valid comments by many professional bodies such as The Malta Chamber of Commerce, the Malta Labour Party and others.
On the 14th April 1999 while Profs. Josef Bonnici was overseas on parliamentary business, John Dalli, Marin Hili (a businessman) and Joe N. Tabone (an accountant) both close friends of John Dalli disappeared overseas to Jersey. On their return it was announced that the remaining nationalised interest in Mid-Med Bank was sold lock stock and barrel to HSBC. HSBC was the bank that took over Midland Bank Trust (Jersey)Ltd., where John Dalli had previously held his off shore bank account. The sale included all the properties and subsidiary companies. One of these companies was the largest provider of mortgages in the country. This sale also included the only Turner masterpiece painted during his visit to Malta in the 19th century and many other works of art by renowned local artists. Picture below is a bank statement in John Dalli's name that he falsely and maliciously accused Joseph Ellul Grech and the MLP of circulating in the Maltese Islands. Ellul Grech was acquitted and the MLP were exonerated of any connection to Dalli's accusations. (article continued below)
This important and economically strategic asset was sold for a pittance (Lm 80 million approximately €184 million) in a weekend of shady negotiations behind closed doors and every one's back. The then Prime Minister Dr. Eddie Fenech Adami and the cabinet of ministers were ignorant of the sale as was the public. At the time the Prime Minister was in hospital undergoing a heart bypass operation. John Dalli informed him of the sale when he was still convalescing.
In all democratic countries, when such an asset is being privatised, professional negotiators are engaged to ensure the best possible price and conditions of sale are achieved. These three wise men had no such experience. They definitely did not have the approval of the general public to whose interest they are duty bound to protect. This national asset was sold for a pittance without authority.
It is general knowledge that as a rule of thumb the buyer of such an asset always pays a commission to those involved in the negotiations. Many allegations of backhanders received by those involved were made. The Malta Labour Party and other bodies demanded a public investigation. However, these were ignored and no one was held accountable.
Without a doubt this purchase of Mid-Med Bank by HSBC was a bargain. The capital payment that was agreed on was to be paid over two years interest free. The total cost was recovered in the first two years. Since then the profits rolled in at an annual increased rate.
This was an irregular sale of a strategic national asset handled by amateurs and without a doubt an abuse and breach of trust coupled with gross arrogance and incompetence. This was a National Asset, not a personal one as John Dalli assumed it to be. John Dalli was never held accountable for his misconduct.