Malta’s biggest lender, government-controlled Bank of Valletta, is paying seven foreign consultants between €2,000 and €1,500 each per day, amounting to millions every year, The Shift has learned.
Senior bank officials, speaking to The Shift on condition of anonymity said the consultants were all selected by the current BOV CEO, Rick Hunkin, the first-ever foreign CEO of the Maltese bank, hired at the start of 2020.
According to the sources, the seven consultants, whose contracts range between one and two years, are all close acquaintances of Hunkin’s, dating back to connections made at British and other financial institutions where Hunkin worked before coming to Malta.
The information seen by The Shift reveals that two of these consultants have been given a two-year contract, and are receiving €2,000 a day for their work. Their individual contracts will cost the bank almost €1 million each. One of these consultants was previously sacked by a British bank and is known to be very close to Hunkin.
Five other consultants have been given contracts with a duration varying between 12 and 24 months at a pay of €1,500 per day. They are expected to be paid some €360,000 per year according to their contracts, which in some cases have already been extended by a further 12 months.
According to calculations made by The Shift, the seven contracted consultants at BOV will share more than €5 million in fees by the end of their contracts. Their names are being withheld for security reasons.
BOV sources described these fees as “exorbitant” and “unnecessary”, the bank has defended its decision saying the consultants are filling in areas where no local expertise exists.
While refusing to give specific details on the thousands the bank is forking out daily for these consultants, citing “commercial sensitivity”, a BOV spokesman told The Shift that “the bank engages local and international consultants who it deems to be specialised in the area of expertise and does so only when it cannot make use of its own internal resources”.
“The fees charged are commensurate with the fees that experienced consultants in these areas of specialisation charge,” the BOV spokesman added.
Bank of Valletta CEO Rick Hunkin
While declining to confirm that all seven hired consultants were ‘close’ to the current CEO in his previous work engagements, the spokesman said the engagements were made through the proper channels.
“Such consultancy agreements are bound by agreed deliverables and are only entered into following a detailed selection process which is governed by the Bank’s procurement process and approval levels.
Any significant contract also required board approval which has been properly sought and obtained in all cases,” he said.
A struggling bank with a marred reputation
While BOV has always been one of the pillars of Malta’s economy, the institution was targeted by the incoming Labour government when it was returned to power in 2013.
Many of the bank’s leaders were removed and replaced with party loyalists, and the bank was chaired for several years by the financial auditor of the Labour Party, Deo Scerri, who had limited experience in the sector.
These changes coincided with the period during which the Maltese government started its controversial passport selling business, large numbers of Libyan nationals began transferring money to Malta, and commercial gaming companies infiltrated by the Italian mafia were allegedly using the bank to move large amounts of funds.
The bank also became entangled in the Pilatus Bank scandal – the now-shuttered lender that’s been described as a money laundering machine – which used BOV as its correspondent bank.
In 2019, the bank was fined some €60,000 by the FIAU for breaches related to money laundering. The Shift is informed that the FIAU is still investigating the bank’s relationship and possible infringements in its dealings with Pilatus bank.
Although the government only controls a minority shareholding in the bank, it has retained the right to appoint the bank’s chairman and several directors. This gives the government of the day effective control over the institution.
BOV has also recently been implicated in two other scandals related to ongoing litigations abroad, which may hit the bank’s profits.
All these factors have led to a significant drop in the bank’s value, with shares currently trading at just €0.85c per share, a plunge of some 40% when compared to 2017.
With Covid-19 and the global downward economic trend also hitting the bank’s prospects, shareholders have failed to receive a dividend for the past two years, with the bank citing ECB directives as the reason.
The Bank’s Chairman’s company, Gordon Cordina, owns a company named E-cubed. A reply to a Parliamentary Question, shows that E-Cubed gets around 3,000 euro per month for consultancy fees from MGA. How can Cordina focus on his task at BOV whilst at the same time providing consultancy to the Malta Gaming Authority?
Possibly as good and possibly better than KSN who claims to spend 10 hours producing his daily tv program whilst receiving a higher salary than 3k a month from a debt ridden Airmalta
Worth investigating a lot of things in BOV……… The extent to which the chairman is placing his own people in positions they aren’t capable of doing, consultants employed on much higher rates than above, the extent to which long standing Executive members have been held to account for creating the problems the bank is now trying to address, the fact that past profitability was achieved by ignoring regulation and neglecting to invest in much needed infrastructure…….🤔
Isthu,jekk tafu,u lilna share holders ,mhux prudentI Li jtuna dividents…..possible Li la l’gvern u lanqasl-opposizjoni hatt ma jiftah halqu
This Hunkin is a really fast learner of the renowned Maltese corporate governance practices and in particular those at BOV. He excels, improves and outdoes those of previous administrations. Board approval is of course always sought although by the look of things none of them really know what hits them.
Loss of40% in share valu and missed out on dividends….retail investors are now in a pitiful state!
Malta’s largest bank lost 40% in its value in less than 4 years. Smashing!
So imagine the size of the hunk, the Hunkin himself is getting …
Whilst the village of Marsascala still have to do with a thirty year old branch , which then used to cater for few thousands. Today, thirty years later with a tripled population we, young and old have to suffer in ever ending queues both for branch and ATM service. To add insult to injury, since some years they dismantled the second ATM from Triq il-Qaliet and was never replaced. I have personally complained about the only ATM machine location. During sunny periods, one has to make a great effort to use it because of the sun’s reflections. On rainy days, one will get drenched.
Thus dear BOV, flush OUR money for:
an extra ATM machine (possibly located on the other side of Marsascala;
locate the current location of the current ATM instead of the branch’s manager office with an opening of an entrance from the facade of the BOV building;
re-instate the cashier’s services on Saturdays which has been stalled with clients being referred to attend at Zejtun branch.
BOV has also recently been implicated in two other scandals related to ongoing litigations abroad, which may hit the bank’s profits.
CAN SOMEBODY EXPAND ON THIS STATEMENT PLEASE?
I do not think so. There are also rumours in the market about mega fines but if all this were true the Bank would promptly issue a Company Announcement as BOV have always been very faithful and true to the shareholder and to the market. Ma tarax.
The “growth” of the Maltese economy is being made at the expense of savers, who get no interest income on their savings, and of investors in shares, who have suffered huge losses on their asset holdings and been denied dividend income.
Meanwhile, land speculators make hay while the sun shines with money that no one knows where it is coming from, while destroying the little that is left of the environment.
Retail shareholders have a right to know what’s going on.
WHERE DOES THE BUCK STOP? IT NEVER DOES.
“Such consultancy agreements are bound by agreed deliverables” . So, do they forfeit the payments if they don’t deliver or don’t meet targets?
Ma Tarax . This people most propably had Konrad Mizzi doing their contract , like the Stewards if they fail they will get a bonus.????/
How very nice, way to go, and what is the government paying our top medical and surgical specialist doctors, for their expertise ?
And then after waiting for 10 min on the line for an agent to answer , you give up. You then leave your phone number as requested and you get a return call 4 hours after your request.
The Maltese government should be investigated because his fingers are everywhere controling and manipulating everything. . BOV became one of the victims in today’s corrupt government.
Anyone should avoid investing in any government backed companies.
As Milton Friedman once said “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”
This is what pirates do. Invade en masse and plunder all.