Bank of Valletta’s former Chief Risk Officer Miguel Borg has been awarded almost half a million euro through an secret golden handshake agreement, according to the latest financial report by the bank.

Borg, 42, from Paola, was paid €468,363 upon his premature departure from the bank. Until last April, Borg was responsible for approving loans by the government-controlled financial institution.

He left just a few weeks after a court sentence described the government’s concession of Steward Healthcare as fraudulent and criticised the €36 million loan issued by BOV to the company.

The Bank Of Valletta report reveals that Borg was paid €265,000 as a final settlement and another €150,000 as an ex-gratia (one-time) payment, negotiated with the bank’s administrators.

These payments were in addition to his three-month salary of €43,233 between January and 8 April 2023, when he officially resigned.

Asked to explain why the bank treated Borg so generously when he resigned voluntarily, a spokesperson for Bank Of Valletta said: “The bank cannot comment on individual employees, past or present, other than the communication issued to the market from time to time through official channels and company announcements. In each case, the bank follows the requirements set out by regulation in this regard and by contracts of employment that determine the relationship between employer and employee.”

The bank did not reply to questions about whether it had issued such generous packages in other instances.

As the bank’s Chief Risk Officer, Borg was responsible for evaluating loan proposals, such as the one approved for Steward Healthcare, and carrying out all the necessary due diligence.

Despite the abysmal results of the hospitals’ foreign concessionaire, including failures to deliver on any part of the concession and apparent liquidity and investment problems, Bank Of Valletta still decided to lend  Steward €36 million. The government guaranteed the sum. 

Media reports described Borg as the government’s go-to contact at BOV regarding credit decisions.

Although Borg never explained the reason for his sudden departure, he distanced himself from the accusations.

According to Borg’s lawyers, “the sanctioning and approval of such facilities (by BOV to Steward) was the responsibility of the Board Credit Committee, of which the Chief Risk Officer (Borg) was not a voting member.”

Borg also said the bank commissioned an internal audit investigation into the allegations against him, and the internal auditor informed him that he had not found any evidence of wrongdoing.

Months before his resignation, Borg was appointed to the board of directors of Malta Strategic Partnership Projects Ltd, better known as Projects Malta, which falls under Prime Minister Robert Abela’s political remit.