The Business Observer Newspaper - 19th November

INTERVIEW

Issue 38

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November 19, 2015

Distributed with Times of Malta

e National Audit Office uncovered various examples of poor governance at Gozo Channel and although chairman Joe Cordina is trying to block the leaks, there are tough decisions ahead. see pages 10 and 11 >

NEWS Malta made a name for itself in financial services thanks to its innovation but Finance Malta chairman Kenneth Farrugia is anxious to keep up the momentum. see pages 5 and 6 >

National Bank shareholders to insist government must pay compensation Shareholders of the National Bank of Malta are insisting the government should respect a court judgment rather than revert to its defeated argument that the bank was insolvent at the time of the takeover.

The 350 shareholders are claiming €325 million in compensation and want the government to come up with a proper valuation of the bank.

In a case that has dragged on for 40 years, the court last year ruled that the 1973 government takeover of the bank (see box on page 3) breached their fundamental humans rights.

The judge did not come up with figures but asked the parties to come up with a value for the shares and damages.

However, the government is sticking to the argument that the bank was “illiquid and insolvent” and that it therefore does not owe a single cent.

Financial consultant Anthony Curmi, who did the valuation on behalf of the NBM shareholders, wrote an internal memo to the shareholders saying he could not understand why the government was still trying to wriggle out of paying compensation.

“The Constitutional Court decreed [even before submission of my report] that the shares

“Can’t we claim that the issue of insolvency is dead and buried?”

had value and so compensation should have been paid by the government. Thus can’t we claim that the issue of insolvency is dead and buried?”

Mr Curmi’s report calculated that the bank was worth €61.4 million (adjusted for inflation) when it was taken over by the Labour government in 1973 after a run on the bank by depositors between December 6 and 10.

The value of NBM’s assets includes over €21.85 million for six properties, currently occupied by the BOV office in Republic Street, two in Marsa, one at the Strand and one at Victoria, and the Tagliaferro Business Centre.

The value of these properties was calculated by architect Godwin Abela in March 2015 and was based on current value as well as comparison with present retail and office rental rates.

Continued on page 3

NEWS e flurry of mergers and acquisitions has spread to the creative sector, with JPA and Visual Trends consolidating to form one of the largest marketing agencies on the island. see page 9 >

CASE STUDY Who should drive financial services innovation? e regulators and government… or the private sector? is is one of the topics to be discussed during KPMG’s conference on December 1. see pages 12 and 13 >

e Business OBSERVER

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NEWS

Shareholders’ report conflicts with government’s Continued from page 1 The NBM had 27 branches but only those it owned were taken into account.

Mr Curmi also calculated the amount that the government had subsequently earned from its shareholding in the bank that it created from the ashes of the NBM – Bank of Valletta. He took into account the dividends paid between 1974 and 2014, proceeds from the sale of shares to the public in 1995 and the market value of its shareholding it still has.

He did not take into account the sale of shares to Banco di Sicilia in 1974 and he adjusted the figure for the money that the government injected into BOV in 1973.

However, the government has submitted its own report, drawn up by Paolo Ugolini and Richard Nun, which insists that the NBM at the time of the takeover was “illiquid and insolvent” and that the amount being claimed was “unreasonable and in no way supported by factors or sound reasoning”.

The government’s experts also point out that Mr Curmi’s assessment of the government’s earnings through BOV were flawed.

“The calculations and alleged value derived by the government after its rescue of NBM are based on unrealistic and invalid

“e bank failed; it was not sold to a willing buyer in an arm’s length transaction nor could it have been sold in its failing condition”

1973 takeover of the National Bank In October 2014, the Constitutional Court confirmed that 82 shareholders’ rights were breached when they were forced to surrender their stakes without compensation.

The Constitutional Court presided by Mr Justice Tonio Mallia, Mr Justice Noel Cuschieri and Mr Justice Joseph Azzopardi confirmed two judgments handed down earlier this year by Mr Justice Joseph Micallef.

The judge ruled that the shareholders’ fundamental human rights had been breached when they were made to surrender their stake without compensation.

The court cases had been instituted by shareholders or their heirs in 1992 against the Prime Minister, the Finance Minister and the Administration Council which briefly ran the bank in 1973.

In the two separate preliminary judgments handed down in January and February, the court upheld the claim

assumptions and on the premise that if the shareholders, board of directors and managers of NBM had retained control of the bank they would have achieved the same level of profits as did BOV. “However, this fails to recognise that the success of BOV was due primarily to (i) the ownership of the government which restored public confidence in the bank by fully guaranteeing all deposits which NBM would have been

that their constitutional rights had been breached. The court said it was clear shareholders were forced to give up their shares, even though it might have been in the national interest, or to avoid the bank’s financial collapse.

Mr Justice Micallef had said that, even if the takeover of the bank had been a “salvage operation”, this did not give the government the right not to compensate the shareholders for their losses.

The next step will be for the judge to hear submissions over the value of the shares in question and the liquidation of damages.

The former Nationalist government had unsuccessfully tried to negotiate an out-of-court settlement with shareholders. Sources said the government had offered about €20 million in compensation but this was not accepted.

unable to do; (ii) the infusion of new capital by the government; and (iii) the change in management which restored prudent banking practices and returned the bank to a safe and sound condition. Therefore, this claim is wholly without merit,” they wrote.

“The bank failed; it was not sold to a willing buyer in an arm’s length transaction nor could it have been sold in its failing condi-

tion. As for depriving the NBM shareholders of their long-standing banking business, neither the government nor the Central Bank prevented the NBM shareholders from using their own resources or soliciting new investors to save the bank, and since the shareholders were unable or unwilling to do so within the urgent time constraints of the imminent failure, the government had no choice but to intervene to protect the

depositors and creditors and to ensure stability of the financial system. These claims have no merit whatsoever.”

Mr Curmi said that it was up to the court to determine both the amount of compensation and the method of settlement but added that the obvious solution would be to transfer its shares in BOV – which he calculates are worth €195 million, not nearly enough to cover the claim of €325 million.

e Business OBSERVER

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November 19, 2015

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NEWS

Finance Malta wants faster innovation Malta recently ranked first for efficiency in transposing directives into national legislation – but the chairman of Finance Malta, Kenneth Farrugia, believes that the pace of innovation needs to accelerate.

“We claim to be nimble, but we need to push it much more. Innovation needs to be much faster paced.

We need to induce changes which will make Malta competitive as quickly as possible,” he said.

Malta has benefited from its innovative legislation, from protected cell companies to remuneration policies, and from the self-managed concept to securitisation. But with so much happening in the financial services world, all jurisdictions have to be one step ahead.

“This is very important for us as it gives a first mover advantage. The MFSA does an excellent job in that respect. But as the industry grows we need to remain customer centric as far as efficiency is concerned – across the board. “Our responsiveness to process in a reasonable timeline needs to be on both the side of practitioners dealing with customers and the

regulatory side. Practitioners need to be efficient. They cannot take on business without strengthening their infrastructure.

“We need to measure how long it takes for a company coming to Malta to get approval so we can benchmark ourselves.”

Malta’s financial services sector is booming and Mr Farrugia confirmed that the conduit of business was very strong and not sector specific. He laughed when asked about some practitioners’ half-joking jibes that Finance Malta should be renamed Fund Malta.

He listed the various events covered by Finance Malta, which covered a wide range of financial services including asset management, insurance, financial institutions, trusts and foundations as well as wealth management. He confirmed that apart from capital markets, particular focus would be given next year to Islamic finance.

“This market is set to grow but it is useless to talk about it without having a proper marketing programme. In fact, we are organising our first event on the topic in

THE MFSA OFFICES IN ATTARD.

December,” he said. “We are organising at event on securitisation in New York in the first quarter of next year.

“Of course, the growth of the funds sector is very important and it is definitely one that we want to keep pushing forward, alongside the others. But we do not want to be a jurisdiction that is underpinned by just one sector. Quite the contrary, a very positive nice thing about our financial sector is that it is driven by diversity, not only in terms of the sectors that we are supporting but also in terms of the clusters that are shaping themselves.”

The importance of diversity is more important than ever before.

Many other island states like the Bahamas, Jersey, Guernsey, Bermuda have economies which depend on just one particular sector within one segment. When that sector dips, then so does the entire economy of the jurisdiction – something that Malta has managed to avoid, even in the darkest days following the financial crisis of 2008.

Continued on page 6

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NEWS

Financial arbitration welcomed Continued from page 5 Diversity and innovation are both tools which will help Malta through the current climate, especially with pressure building up for tax transparency and even tax harmonisation. Since the government in 1994 passed legislation, changing Malta from an offshore to an onshore jurisdiction, it has managed to avoid the stigma of a tax haven – even if that sometimes meant fighting against attempts to paint it that way.

Clearly a good tax system is important to investors: 75 per cent of EY respondents in the Attractiveness Survey found corporate taxation attractive or very attractive and half of them considered it a factor in investment decisions. But there is a difference between an attractive regime and a tax haven. Mr Farrugia is fiercely proud of Malta’s tax regime, saying it is based on fully transparent legislation which was whitelisted by the OECD. “We do not have – like some other jurisdictions – a regime which is underpinned by bespoke arrangements with operators to attract them to the island. I don’t want to mention names but we have seen the stories that emerged in the media lately. We have never had these issues. No one can claim that our tax regime has grey areas.

“Is it one of selling propositions that we have a good tax regime? Yes. “Is it our only one? No.” This point becomes ever more important given talk of harmonising taxes in the EU. Mr Farrugia said that the finance minister, Edward Scicluna, has been very clear and outspoken on this: tax is the sovereign right of a country.

“I think we are all for fostering close collaboration between member states in the EU. However, we cannot apply a blanket rate across all member states because of the different economic realities.

“Take one example: Malta, in contrast to all other member states, in-

“In Malta, we have not invested in [legal expertise in the courts]. As the industry evolves we are bound to experience problems and we should pre-empt it” FINANCE MALTA CHAIRMAN KENNETH FARRUGIA

creased pensions this year. We would not have been able to do so had there been a policy for all the member states. You have to have the flexibility within each member state to tailor its economic policies to reflect its realities.

“What applies in one member state would not apply in another.

Of course there should be scrutiny of government finances and regulation but I am totally against the idea of having a minimum effective rate of tax. That should be left in the hands of the national authority,” he said unequivocally.

Another change looming on the horizon is the OECD’S Base Erosion and Profit Shifting (Beps) which could make double taxation agreements – another of Malta’s competitive advantages – a thing of the past.

“It could be an opportunity for Malta as we are a tried and tested jurisdiction.

“About eight years ago, financial services were predominantly driven

by the setting up of products in Malta; we are now seeing the setting up of service operations on the island. This gives us much more substance as service operations are much more ‘sticky’.

“If a jurisdiction is compelling, then you strengthen your presence there. This is what we have seen happening with a number of operations which started with a minimal presence and then grew. We just had the opening of Credorax which went from single digit presence – probably the minimum required from a regulatory point of view – and now has some 90 people,” he pointed out.

Discussions on Beps are still going on, but the new structure is just the latest challenge, following on the Financial Transactions Tax and the Common Consolidated Corporate Tax Base, to name but two.

Another challenge for the financial services industry is reputational risk, and this does not only come

from the sector itself. Can gaming and financial services happily coexist in a jurisdiction? Wouldn’t the fear of money laundering – including the recent claims of Mafia involvement – imply so? The chairman was pragmatic.

“There is a reputational risk in everything. There will be incidents, as happens everywhere with misselling, pensions, mortgages and so on. It is not something you like but you have to live with it. These are the unintended consequences of an industry that is evolving.

“Let us not be overly phobic about it. We clearly need to carry on strengthening our screening and due diligence processes to make sure that the businesses that come here are reputable, and we must do periodic reviews of those businesses to ensure that there is ongoing governance.”

The provision of resolution mechanisms is also important in this respect. Although the consumer affairs section of the Malta

Financial Services Authority is very active, the intention is for the financial ombudsman or arbiter to have a completely separate structure.

“It is preferable for the ombudsman to be separate from the MFSA as there could be a conflict of interest if you have the same entity giving a company a licence and at the same time having to reprimand it.”

However, he also warned that the system should not be abused by investors: “Let us appreciate that there are clients who try to put pressure on providers by threatening to go to the media. We have to make sure that we have a level playing field. If there is abuse, we should be able to get it at the roots.”

London is setting up a specialist court for financial markets aimed at international disputes – would it be presumptuous for Malta to do the same?

“Malta does not have a specialised court for commercial cases, let alone for financial services. We need to do something about this. It is extremely important as when you have an operator in the market who wants redress they do not go to the local courts. We need to have some sort of tribunal with the necessary legal expertise… I think we should start with a unit or organisation which can assist companies seeking redress and then, and only then, look internationally.

“In Malta, we have not invested in this area. As the industry evolves we are bound to experience problems and we should pre-empt it. You should not build something like that as a knee jerk reaction. It is in the interest of the legal and consultancy profession to have someone who can understand the implications if there is a case involving complex derivatives, for example.

“I am definitely all for a financial services tribunal within the law courts which can take on financial services cases and have executive powers.”

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e Business OBSERVER

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November 19, 2015

INDUSTRY FOCUS

Call for Commonwealth Chamber of Commerce The Malta Chamber of Commerce, Enterprise and Industry will be using the Commonwealth Business Forum to call for the creation of a Commonwealth Chamber of Commerce.

This would bring together chambers of commerce and business federations from across the association in a bid to facilitate business and investment collaboration.

“The pan-continental association would work on the same lines of similar organisations such as Eurochambres and Ascame, which have successfully worked towards the improvement of businesses conditions across regions and facilitating access to new markets,” chamber president Anton Borg explained.

Malta will next week host the Commonwealth Business Forum, and various entities believe it is an opportunity for Malta to showcase itself, for companies to network, and for constituted bodies to avail of an international platform.

“The Commonwealth can play an important and determinant role to help Maltese businesses to look beyond our shores as prosperity is propelled by international business.

The Malta Chamber is pleased to contribute directly and play a central role as Malta’s foremost business organisation from the host nation at the upcoming Commonwealth Business Forum.

“After all, the Commonwealth is above all a coming together of people who are willing and able to

engage with one another to maximise the opportunities that arise and to develop close and lucrative economic ties.”

The 53 countries in the Commonwealth have a combined population of 2.1 billion people, almost a third of the world population, and 17 per cent of the world’s GDP. But they also have startlingly different economic weights, ranging from the UK, India, Canada and Australia at the top of the list, to Lesotho and Malawi.

The chairman of Malta Enterprise, Mario Vella, believes the sharing of governance stories could be an important learning experience.

“The Commonwealth network comprises a great variety of economic development experiences.

“e sharing of governance stories could be an important learning experience”

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INDUSTRY FOCUS / NEWS

This diversity is derived from their unequal endowment in terms of natural resources, population, social structure and dynamics, culture and, above all, historical circumstances.

“Although I do not think that any particular country can and should project itself as superior and as a model of political virtue to be copied and followed by the rest, a critical evaluation of our various governance experiences will no doubt enable all of us to improve our record, to the advantage of economic development and growth,” he said.

He also sees important opportunities for Malta, even though only two of its main markets are in the Commonwealth – the UK and Singapore.

“However, goods produced in Malta are well established in Commonwealth member countries, security printing products and processed foodstuff in African Commonwealth countries are a case in point.

“Our bid to seek stimuli of economic growth outside the

economically sluggish Europe, is nudging us to reassess the great potential of the Commonwealth. On the other hand, we must never forget that markets are not conquered with history but with competitiveness,” he said.

The Commonwealth Business Forum will also present networking opportunities, which David Bullock, the president of BNI Malta, believes could lead to considerable business.

Mr Bullock set up the BNI chapter in Malta in2010, as part of this networking organisation that spans 45 countries. He wants to put Malta “where it should be” on the world map – and that the forum will help put it there.

“Visiting international businesses will see the potential of Malta as a regional hub, with all the long-term strategic advantages that it can bring. I am convinced that Malta has the potential to be the Singapore of Europe.

“Back in the 1970s, I ran a large international business in Southeast Asia and witnessed the rising influence of Singapore under Prime

Minister Lee Kwan Yew to become the natural place for international companies to establish their regional head office and from which to develop their business.

“Malta has similar advantages, e.g. strategic location, good communication facilities, sound financial institutions, English-speaking, strong work ethic, excellent health and education facilities to keep an expatriate family happy, a good climate, excellent sailing and diving – just like Singapore.

“As the dust settles after the event, people should be encouraged to think outside the box on how to maximise Malta’s dual membership of the EU and the Commonwealth.

“From what I have seen the Maltese government, the Commonwealth Secretariat and the Commonwealth Enterprise and Investment Council have been working hard to ensure a strong line-up of high profile international speakers and delegates for the Business Forum. Now it is over to the Maltese people.”

(FROM LEFT) ADRIAN FABRI, CHRIS BIANCO AND STEVE CASSAR

Marketing merger announced Visual Trends and JPA will be merging to create one of the largest marketing agencies on the island – boosting their capacity to grow internationally.

The new agency, which will keep the JPA name, will remain at Ta’ Xbiex in the medium term but will eventually move to larger premises.

Managing director Chris Bianco said the merger had solved one of the greatest challenges for the creative sector: finding talent.

“To partner with our clients, we really have to understand where they are coming from and where they want to take the business – and then formulate the marketing communication solutions to get them there. To do that you need talent. We have been able to put together one of the largest talent pools – 44 people – in the field. This is a case where the sum is greater than the parts,” he said.

The two companies have already collaborated on certain accounts in the past and, as the market evolves, the merger puts them in a much stronger position to evolve with it, encompassing everything from classical media to digital and to whatever comes next.

“The industry has become much more elaborate in the past six years and what we bring to the marketing table is not just being specialist in digital or PR or classical media but the holistic knowledge of being able to tailormake the right message, independent of the medium,” he said.

Steve Cassar of Visual Trends, who will now be the creative director, said the merger was an obvious step forward because of the way the two companies complemented each other in terms of clients, strategy and synergy.

“It seemed a natural fit in terms of overlaps and areas of specialisation,” he said.

The new company has not revealed its plans – and there is clearly something big up its sleeve, with Mr Cassar hinting there were other synergies with third parties that needed to be developed through “collaborations”.

But financial director Adrian Fabri did confirm that JPA intends to carve out more space in the international scene as well.

“The real potential lies in the future. From a local perspective we intend to consolidate even more, churning out work that is recognised by the business community, and yes, hopefully, more internationalisation will follow.”

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November 19, 2015

INTERVIEW

GOZO CHANNEL. PHOTO: VANESSA MACDONALD

Plugging the ferries’ leaks JOE CORDINA was appointed executive chairman of Gozo Channel in April 2013 and was faced with financial meltdown and shocking governance issues. He told VANESSA MACDONALD that things were turning around but that big decisions needed to be taken on the future of the ferry service.

The National Audit Office was commissioned in December 2013 to investigate various aspects of Gozo Channel governance between 2010 and 2012. There were a number of shortcomings.

Why has no one been held accountable?

That is the way the country works… Many of the people involved are politically appointed and when they and the government change, everything ends.

You are also politically appointed. What is the difference?

I can only speak for myself. I have done, am doing keep doing my best, wherever I am.

I think that those who were responsible could have done some things in a better way.

Perhaps some of the blame could be laid at the minister’s door as it seems that a number of shortcomings were reported by employees but were not followed through.

One example of this is the theft from the cafeteria. The manager there said she had reported it to the chairman at the time, Paul Curmi, who in turn passed it on to the minister. But the pilfering kept going until I took over…

The annual accounts for 2014 filed last week show that Gozo Channel made a loss of €1.3 million in 2013 and a token profit of €42,633 last year from revenue of €14 million.

However, there are still some red flags. Gozo Ferries owes Gozo Channel just over €8 million, almost two-thirds of which is for the hoistable deck on MV Ta’ Pinu. It seems unlikely that Gozo Ferries will ever be able to repay it. The NAO said that Gozo Channel might not be considered a “going concern” if this debt could not be settled. What is happening?

The first thing is to ensure that Gozo Channel does not continue to make losses.

“If this were the private sector, we would be able to take on part-timers just for the summer – but the government sector does not work that way” Apart from breaking even in 2014, based on the results of the first nine months of the year, we anticipate making a profit in 2015 of €500,000.

As at end 2014, you owed €7 million, almost all of which is due to six creditors: Transport Malta (€3,937,488), Drydocks Malta (€854,290), Cassar Fuel (€573,669), Malta Shipyards (€502,631), Enemed (€264,222) and Malta Shipbuilding (€248,125). Is anything being done to settle these amounts?

We have not paid bills that we are still contesting. But we are trying to settle bills with other creditors within 60 days. Unfortunately,

we are a government company and there is a tendency to take advantage of this...

Employee costs for Gozo Channel amount to around 50 per cent of total expenditure, but a 2010 Washington State report indicated that US, European and other ferry operators spent an average of 42.8 per cent on labour. Is Gozo Channel yet another government entity used to create jobs?

Maybe it was before but in the past three years, we have not taken anyone on, with the exception of two engineers that we needed. In fact, we are not replacing people who leave.

The current headcount is around 200. A 2014 report said it would be possible to operate with 11-man crew for passenger trips and a seven-man crew for cargo journeys – without any need for overtime for seaborne staff. What is your ideal headcount?

I have to say I think that we are at the ideal now.

Our minimum manning requirement is 15 when there are more than 500 passengers and 11 when there are fewer than that.

Some sections might be trimmed or restructured but not others.

And I would like to boost internal controls, which requires more staff.

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November 19, 2015

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INTERVIEW

It is always about the quality of service that you want to offer: I could have just one person on ticketing but then customers would have to wait longer. That is the constant dilemma, balancing the need to make a profit against the need to offer a service.

Overtime for 2010-2012 cost GCCL over €1.8 million. There were some ridiculous examples in the NAO report: an ICT clerk worked 1,319 hours of overtime, equivalent to 33 40-hour weeks of overtime; a workshop fitter 1,101 hours; a driver 1,104 hours; and a chief engineer 1,148 hours. What has been done to curb this?

Clearly it was exaggerated and I do not exclude that there was abuse. I think we have done all possible to cut abuse as there is now a process requiring two approvals.

Overtime is a big issue for us as you have to adjust to operational needs, which cannot always be anticipated in advance. And when we need to work extra trips – say on Sundays – then the whole crew needs to stay on, not just one person.

There is also the issue of seasonality. If this were the private sector, we would be able to take on part-timers just for the summer – but the government sector does not work that way. We do not have that flexibility.

The Public Service Obligation bid contemplated that Gozo Channel would hedge its exposure to fuel costs – almost €6 million a year – but it never did. Hedging gives you certainty but not necessarily savings. Did this lose money or save money for Gozo Channel?

We saved because the cost of oil fell. Had we hedged, we would have been tied to the higher price.

But in any case we are too small for hedging companies. So we are still not hedging and at the moment, we do not think it would be in our interest to do so.

There was a time in 2010-2011 when the Malita’s fuel meters were not working and the Falzon Fuel’s barge meter readings were not noted. Is that just a coincidence?

GOZO CHANNEL EXECUTIVE CHAIRMAN JOE CORDINA. PHOTO: DARRIN ZAMMIT LUPI

Mickey Mouse operation was this?

Nowadays no one is allowed to retain cash. Tickets are not being sold that way.

The public service obligation (PSO) runs out in 2017…

Look, the PSO bid was a great mistake. Income was boosted and the expenses were reduced to make it sound viable. The intention was to ensure that the joint venture between Gozo Channel and Gozo Ferries was the best option.

I do not understand why the government was so scared of another operator coming in… Of course, there would have been concern about the Gozo Channel workers and there was an election looming.

The government used to pay €5 million a year through the PSO and this has now gone down to under €1 million. You have to be kidding! This is what threw the company into chaos!

How can you be sure there was no pilfering?

I cannot say what was going on but now there are many controls on fuel. Our engineers oversee it and take soundings, etc. And the tender is being issued regularly – as it is supposed to be.

In August 2014, there was a lot of controversy about the fact that Go Fuels did not win a tender…

This was sorted out. Go Fuels was a supplier for some years and was obviously unhappy at losing.

The tender had been issued and since there were a number of objections, we had to issue a short-term tender to cover the three months till these were concluded. There was also a misunderstanding in the media about the price quoted: it was the commission of the other bidder that was twice as high, not the price of the actual fuel.

We now have a year-long tender with Falzon Fuels and are already working on the next one.

There were discrepancies in ticketing from two aspects, at Mġarr itself, and between Ċirkewwa and Mġarr, which could have cost as much as €1.45 million between 2010-2012 and 2014. A number of theories were put forward, ranging from software discrepancies to fraud by officials stationed in the marshalling area. What has been done to control this?

I am not convinced about the numbers. At Ċirkewwa, it is a visual check made by those who moor the ship and is therefore subject to human error. We are putting a lot of pressure on them to be accurate but it is not necessarily lost revenue…

There was a variance of over 95,000 passengers and 11,000 cars.

Surely that cannot be down to human error alone!

There might be abuse and more controls might be needed but I am not sure that the discrepancies were as big as reported.

I am not convinced. And neither was the NAO… None of the theories would account for the numbers…

The only possibility would appear to be systematic abuse.

What can I tell you? Look, we have a number of controls in place now and the numbers still do not tally. I still put it down to human error. I can see that you are still not convinced… I want to make the system electronic. In my opinion, one of the biggest disasters for Gozo Channel is that there is no ticketing in Ċirkewwa: the €15 million terminal was designed that way! To introduce ticketing, we would have to change everything around. There is not even a holding area for passengers behind turnstiles, as there is at Mġarr!

There was so little control that one ticket seller apparently “recalled” that he still had €9,700 in an attaché case. Some ticket sellers had monthly undeposited amounts of up to €33,694. What kind of

You yourself are showing the company is viable if run properly, even with a PSO of €720,000…

But no one is talking about the money owed by Gozo Ferries, which owns the ferries and needs to spend over a million a year to maintain them! Gozo Channel is just the operator.

The ferries are already 15 years old – which means they have around 15 years of reasonable life left. If the decision to build a tunnel goes ahead, it would be ready within five years, according to Transport Malta CEO James Piscopo. Will you still replace all three vessels – which would cost around €135 million?

You need to ask Gozo Ferries Ltd! The vessels would be theirs…

You cannot have just one as you always need a back-up. However, the frequency could be reduced if there were a tunnel, probably to a trip very hour. It depends on what happens once the tunnel is up and running.

We do not know if there will still be a PSO once the tunnel is opened. Would it still make sense? continued on page 13

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e Business OBSERVER

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November 19, 2015

CASE??

STUDY

Private sector needs to drive financial services legislation The financial services industry tends to rely on government and regulatory bodies to come up with innovative legislation, but the time may have come for the private sector to push its own ideas.

Sarah Camilleri, an associate director at KPMG Malta, said practitioners were much more proactive in the past and the stream of ideas may have slowed down from some as they struggled to keep up with all the changes. However, she stressed that the private sector was the key to innovation as it knew the parameters of EU regulation and how the rules work.

“The regulators and policymakers might not see as much as we do from our clients so we can give more insight,” she said.

Innovation is one of the topics that will be tackled during the KPMG conference on December 1 entitled Malta’s Financial Services Industry: What Next?

Ms Camilleri will be leading a break-out session on investment management, asset management and investment services – all of which slowed down their breakneck growth for the past two or three years to deal with the onslaught of regulations.

“We are seeing more women owning the world’s health, which is having a huge impact as they look at investments in a very different way” “Coming out of that distraction, we think the sector is trying to focus on actually growing the business. The market is changing and there are opportunities being created as a result of the changing

world environment,” she said.

She outlined some of the key global megatrends affecting investment management, ranging from the way in which people manage their assets to the huge number of

(FROM LEFT) SARAH CAMILLERI, GISELLE BORG AND MARK CURMI

new asset classes and the impact of technology and social media.

“And investors are also changing. We are seeing more women owning the world’s wealth, which is having a huge impact as they look at investments in a very different way. By 2030, we expect the investment management world to be very different,” she said.

Another break-out session at the conference will be chaired by KPMG Malta senior manager Mark Curmi, and will follow on from the firm’s banking publication – the first of its kind – which

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CASE??

STUDY

created a comparative study of all of Malta’s 28 banks, complemented by ‘thought leadership’ articles giving considerable insight into present and future issues.

He believes that the time has come for banks – especially the core banks that serve the local retail market – to assess their business model.

“The setting up of the Single Supervisory Mechanism a year ago has forced banks to rethink the way in which they operate. Gone are the days when a bank can offer the full suite of products.

“Driven by an increasingly complex regulatory framework and substantial increase in compliance costs, banks have started to ask whether it makes sense to operate all the services akin to traditional banking. Banks are essentially in business to make money and it would be selfish to shareholders and industry stakeholders as well as self-defeating for core banks to attempt to deliver all the services in today’s banking environment. Something has to give and, if or when it does, it would have a ripple effect on the whole industry,” he explained.

The termination or curtailing of service lines would create opportunities for new banks and potentially also for existing banks keen to offer international services that might not interest larger banks.

The banking sector in Malta has seen its fair share of turmoil, with Banif and Lombard Bank shareholding up for sale and Deutsche Bank recently announcing that it was leaving the island. But none of this worries Mr Curmi, who believes that the real story is the banks that are being licensed today.

“There is a lot of activity. Last year, KPMG was involved in two new merger and acquisition deals and this year we are involved in another two. These are filling niche sectors in the market, also catering for specialised products and services like custody services, trade services and structured trade finance.

“Malta has been trying to promote itself as a trade and logistics hub, which does not

Company has to balance profits with providing ‘a social service’ continued from page 11

“How are we going to attract the right type of banks to fill niche segments?” necessarily mean the trade has to flow through Malta – only the support structure. And various stakeholders are working on the setting up of a national development bank. This is what it is all about: how are we as stakeholders going to attract the right type of banks to fill niche segments which the larger banks in other jurisdictions do not cater for?”

The conference will also be looking at insurance and no discussion on this sector can avoid Solvency II, the directive which comes into force at the beginning of 2016.

However, Giselle Borg, an associate director at KPMG Malta, believes that the industry has perhaps not yet fully exploited the possible advantages of applying proportionality.

“Some companies have been looking into it and have had discussions with the regulator but other operators are not fully aware of how it could be applied to them in practice. Other companies can benefit from this principle as it is not only to do with the size of the company but also the nature and complexity of the risks,” she explained.

Of course, proportionality and Solvency II are only two of the issues that the insurance sector has to deal with, another important one being the shortage of talent.

A recent international survey showed that four out of every five employers feel that they do not have the right level of skill set in their organisation.

“More than 50 per cent anticipate growth, so things will only get worse,” she said.

“Insurance is rarely thought of as a professional career – which is something that we want to change.”

In today’s economic and regulatory environment, the insurance industry is increasingly facing practical challenges in terms of competition from other insurance companies as well as other financial services industry players in general. Turning such challenges into opportunities is vital for Malta’s local growth in insurance as well as for its continuing reputation as a lucrative jurisdiction.

The one-day conference will be held at the Hilton Malta. For further information, visit www.kpmg.com.mt or call 2563 1000.

I think Gozo Channel will continue to run ferries as there are people who like the experience of crossing over by sea – including tourists.

Why would I spend 50 minutes to take a ferry when I can cross in the tunnel in 12 minutes?

If you are going up to Gozo for a holiday, you will not be in a rush, so it will not matter as much. For a Gozitan going to work or to study, well, they would certainly use the tunnel.

If you did not operate under a PSO, you would have the flexibility to operate as a commercial enterprise, cutting night trips which always operate at a loss, for example. Before you had no choice…

Precisely. The fares are also subsidised: how can you charge €1.15 if you did not have a PSO subsidy? That is less than a cup of coffee for a return trip! We are charging the same as we did 10 years ago – the euro equivalent of Lm0.50.

Having said that, the subsidy works out to only 1 cent for every Gozitan that uses the ferry… How can you work with that subsidy?

Yet you managed to report a profit of €42,600, turning things around from a loss of

€1.3 million in 2013. And you expect to make a profit of €500,000 this year.

To do that we had to increase efficiency, cut waste and introduce significant internal controls: a number of wrongdoers were either forced out or are in court.

We cannot escape the fact that we have to balance the need to run a commercial operation with the need to provide a social service. We increased the number of evening trips in winter – we now only have summer and winter schedules – so that there are trips every 45 minutes until 9.30pm. It is not in my commercial interest to do this.

We did it because we are aware of the need to provide a service to our customers.

In the mornings, we are bringing in extra crew to cope with the additional work on the early morning ferries as there are so many more Gozitans commuting to Malta. And those ferries go back virtually empty.

Isn’t this is also a problem when you operate a shuttle service? A trip breaks even when a vessel carries 56 vehicles, according to the NAO. If you had to think that way, you would cut half the schedule!

But you have to provide a service. Gozo Channel is the only link between Malta and Gozo.

There is no alternative.

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e Business Observer is Malta’s leading business newspaper distributed with Times of Malta every fortnight.

Editorial Vanessa Macdonald, Assistant editor, Times of Malta.

EDITORIAL

Saving a sinking ship When the National Audit Office issued a damning report on Gozo Channel last May, the public response was tepid.

There should have been furious letters in the media, calls for heads to roll, embarrassed promises to ensure this never happened again.

How sad that as a nation we have become so used to unacceptable governance that we cannot bother to protest, that our expectations for public officials never rise higher than mediocre.

The NAO report, which filled 130 pages, highlighted staggering shortcomings, ranging from thousands of hours of overtime to missing data on both fuel dispensed and fuel received. The scale of the issues beggars belief. Where were the executives who should have been on the lookout for just this sort of abuse? Where were the directors who should have held the executives to task? Where was the minister who should have been checking that taxpayers’ money was being well spent?

That is the greatest worry: not that there was abuse but that it was systematically ignored.

It was no surprise that Gozo Channel lost €1.3 million in 2013 – and lurking in its accounts was a festering wound: Gozo Ferries, which owns the ferries operated by Gozo Channel, owes €8 million, which it is unlikely to ever be able to pay. The auditors had warned that this threatened the future of the company as a going concern – which has massive implications when you consider that the ferries are the only link between the two islands. Had the company been declared insolvent…

Well, it does not bear thinking about.

When Joe Cordina stepped in two-and-a-half years ago as chairman, there was little optimism that he – or any government-appointee – would do anything different. And yet, like his counterpart Frederick Azzopardi

at Enemalta, he seems to have been willing to roll his sleeves up and at least try to tackle the rot.

Doing this – whether at Gozo Channel, Enemalta or even Mater Dei Hospital, means breaking through decades-old silos, systems set up deliberately to facilitate pilfering, to create little pockets of power, to invert the executive hierarchy.

The amazing thing about any corporate turnaround is, however, how quickly it can be achieved once the message goes out that the new kid in town means business. In 2014, Gozo Channel showed a minimal profit but this year, Mr Cordina claims it could be as high as €500,000, a turnaround of nearly €2 million in two years.

It could not have come soon enough. If Malta really does go ahead with the tunnel, the role of Gozo Channel will have to be completely reassessed, from how many new ferries to order once the current ones reach the end of their economic life in 15-18 years’ time, to what schedule it should offer.

At the moment, it has to balance the commercial reality of its operations with the need to provide a service for those who commute between the islands, something a purely profit-driven company would not have to do.

That is why it receives a public service obligation (PSO) payment from the government. But the PSO runs out in 2017 and if there really is going to be a tunnel, then it needs to be rethought. Gozo Channel will no longer need to put the social aspect of its operations ahead of its sustainability.

Only time will tell whether the changes and internal controls being made will last or whether the rot has only been papered over. One thing is clear, however. Unless Gozo Channel is financially sustainable, it may find it hard to argue for its future once the tunnel is open.

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BUSINESS OPINION

Capital Markets Union, really for SMEs?

Mark Scicluna Bartoli On September 30, 2015, the EU Commissioner Jonathan Hill launched the European Union’s capital markets action plan. This plan adds flesh to one of the key priorities of the EU Commission president Jean Claude Junker which is a Capital Markets Union (CMU) for all the 28 member states.

This is an ambitious objective with the proposed action plan targeting five key areas over the next three years: (a) facilitating financing for start-ups and non-listed companies, (b) improving the investment environment for long term infrastructure financing, (c) fostering retail and institutional investment, (d) leveraging banking capacity to support the wider economy, and lastly (e) facilitating cross border investments.

The EU’s CMU initiative is designed to complement the €315 billion European Fund for Strategic Investments (EFSI). Aware that EFSI funds are not sufficient to lift the EU economy from the low levels of economic growth, the CMU

“Compared with the US, European companies receive five times less funding from capital markets” is envisaged to provide the required funding to the European economy over the longer term.

One of the motivations behind the setting up of a European CMU is to reduce the divergences between the US and the EU economies in this area. A study entitled Bridging the Growth Gap, written by the Association for Financial Markets of Europe in collaboration with Boston Consulting Group, highlighted that the US economy has performed

better than the European economy since the crisis. The report identifies that one of the reasons for this is Europe’s low reliance on capital market financing. Compared with the US, European companies receive five times less funding from capital markets.

A successful CMU would result in European enterprises finding it easier to raise finance on capital markets while at the same time seeking funding in an another EU member state would not be

restricted by legal uncertainty and supervisory barriers. This vision is commendable and worth supporting in view of the positive ramifications this will have on the long-term growth of the European economy.

However, while the European Commission insists on the benefits it would bring to SMEs as a whole, the real beneficiaries from an EU Capital Markets Union would be large and mid-cap companies as well as innovative

start-ups that are able to become Europe’s future multinationals.

It needs to be acknowledged that the vast majority of SMEs require relatively small amounts of financing that would not justify accessing an EU Capital Markets Union. Such financing requirements will need to continue to be serviced through conventional forms of financing, such as owner and bank funds.

It is therefore important from an SME perspective that a CMU complements European bank financing. The CMU’s action plan endorses this principle since it proposes to undertake a comprehensive review of the cumulative impacts of financial reform together with a review of the capital requirements regulation (CRR).

These reviews are welcome since they may present solutions to alleviate some of the restrictions faced by European SMEs when seeking bank financing in recent years. I believe that the frenzy to legislate following the financial crisis resulted in cumulative regulatory effects that are pushing banks away from financing SMEs. The recommendations presented in the cumulative impact assessment and the review of the CRR will be an interesting read for both banks and SMEs alike. We eagerly await their publication in 2016.

Mark Scicluna Bartoli is head of EU & institutional affairs at Bank of Valletta and is also responsible for Bank of Valletta’s EU representative office in Brussels.

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APPOINTMENTS

Partners appointed at Mamo TCV Advocates (FROM LEFT) JOSEPH CAMILLERI, MANAGING PARTNER ANDREW MUSCAT, EDMOND ZAMMIT LAFERLA AND NICHOLAS VALENZIA

Mamo TCV Advocates has appointed Joseph Camilleri, Nicholas Valenzia and Edmond Zammit Laferla as new partners of the firm, bringing the total up to 10.

Mr Camilleri joined the firm in 2003 and forms part of the litigation and alternative dispute resolution department of the firm while Mr Valenzia has been an associate with the firm since 2004 and currently heads the shipping and aviation department within the firm.

Mr Zammit Laferla joined Mamo TCV in 2011 as a senior associate after spending more than eights years heading the legal office of a local insurance company and acting as its company secretary. He forms part of the corporate department of the firm.

Head at HSBC Malta HSBC Bank Malta has appointed Anna Camilleri as head of internal audit.

Ms Camilleri will be joining the bank from PwC where she held the post of senior manager for governance, risk and compliance services.

She has developed a strong audit background through her time with PwC and has managed numerous complex internal audit and business process re-engineering assignments both in Malta and abroad.

ALDO CALLEJA

Be.HOTEL gets new general manager Aldo Calleja has been appointed as the new general manager of the be.HOTEL at the Bay Street Tourist Complex in St Julian’s.

Mr Calleja will oversee the recently-approved multi-million euro expansion of be.HOTEL, which will see three guest floors added to one wing and a new multi-purpose facility to enhance its offering to the conference and incentives market. e extension has to be ready by March 1, 2016.

“Our ultimate aim remains that of having a four-star property with a five-star mentality,” Mr Calleja said.

Starting out in food and beverage operations with Corinthia Hotels International, Mr Calleja worked his way up through the ranks in the hotel business and was involved in all the operations of running a hotel. From Corinthia, Mr Calleja moved to the Xara Palace Hotel and then to Park Hotel, where he was general manager.

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STOCK MARKET REVIEW

Investing in complex financial instruments

Edward Rizzo Following the company announcement and formal notice by Bank of Valletta plc, as well as my article titled A Bond Partially By Ballot explaining certain features of the new BOV subordinated note issue that make it a complex financial instrument, many people have been asking about the procedure for applying for some of these bonds and who can assist them in the process.

As a start, it is worth highlighting that apart from this new BOV

bond issue, there are various other subordinated bonds already listed on the Malta Stock Exchange, from BOV as well as other banks such as HSBC Bank Malta plc and Mediterranean Bank plc.

The subordinated nature of these bonds also classifies them as complex financial instruments.

Moreover, it is important for investors to understand that it is not only subordinated bonds that are classified as complex financial instruments but other types of bonds and instruments.

In its opinion paper published in February 2014, the European Securities and Markets Authority (ESMA) explained that complex instruments also include ‘callable’ bonds.

For investors mainly focusing on the local market, it worth highlighting that there are several callable bonds currently listed on the Malta Stock Exchange since in the past years many companies opted to issue bonds with an early repayment option.

Furthermore, those who invest across international financial markets should note that ESMA classify exchangeable bonds, convertible bonds and perpetual bonds among the list of complex financial instruments. In fact, many bonds across international financial markets have such features and therefore many investors are already exposed to various complex instruments.

However, the degree of complexity varies across different instruments and different features and structures affect the

intrinsic level of risk. As an example, the complexity of a callable bond that can be redeemed two years prior to the final maturity date cannot be compared to a convertible or a perpetual bond.

As such, the MFSA had indicated in a circular in March 2014 that it does not necessarily follow that a person who has the knowledge and experience to invest in callable bonds also has sufficient knowledge to invest in perpetual bonds. The features that put the instrument into a ‘complex’ category differ from one to another

“A licence-holder... must ensure that the investor understands the particular features of the instrument or product”

and the investor needs to be comfortable with the salient features of the particular financial instrument.

Moreover, by way of clarification, ordinary shares listed on a regulated market (such as the MSE) and bonds without a callable feature (sometimes referred to as bullet bonds) are classified as non-complex instruments. These type of bonds are now more commonly being issued in Malta.

So what is the procedure for investors who wish to apply for these BOV subordinated notes?

As indicated last week, the first tranche of the BOV subordinated debt issuance programme is split into two different series. Series 1 applies to investors subscribing for a minimum of €25,000 while under Series 2, investors may apply for a minimum of €5,000.

Under Series 1 (minimum €25,000), applicants interested in applying without seeking advice must undergo an appropriateness assessment. On the other hand,

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STOCK MARKET REVIEW

should an applicant seek investment advice or portfolio management services from a licence holder, then a suitability assessment is necessary.

Under Series 2 (minimum €5,000), all applicants must seek advice and must undergo a suitability assessment. This series cannot be applied for by anyone who does not first seek advice.

In terms of MFSA rules, an appropriateness test is to be carried out by licence-holders to assess whether the investor possesses the necessary knowledge and experience to invest in the proposed instrument and to understand its features and risks. In this case, applicants will be asked to provide certain information including their level of education, their knowledge of bond markets and the features of subordinated debt and their experience in investing in similar complex instruments.

When providing investment advice or a discretionary portfolio management service (where the licence-holder has been mandated by the investor to invest at his discretion on his/her behalf), an investment services licenceholder must assess whether the instrument is indeed suitable for that particular client.

This assessment of suitability is a requirement in terms of MFSA rules to enable the licence-holder to act in the client’s best interests.

It entails understanding the person’s knowledge and experience in relation to the instrument being discussed as well as the person’s financial background and investment objectives.

In this case, applicants will be asked for the same information required for the appropriateness assessment as well as additional information on their investment objective, risk apetite, investment horizon and also a summary of their financial standing (including values of their assets, liabilities and average level of income).

On November 4, the MFSA issued a circular to investment services licence-holders (which is also available on their website) reinforcing the importance of the appropriateness and suitability assessments, particularly in the case of complex instruments and highlighting best practice in this respect – such as the requirement

Rizzo, Farrugia & Co. (Stockbrokers) Ltd (RFC) is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results.

Neither RFC, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report. © 2015 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

“[the investor must] answer a number of questions regarding the subordinated nature of these bonds and the understanding of the bail-in mechanism” to elicit clear answers from clients in respect of the investment’s features.

Furthermore, the MFSA stipulates that a licence-holder that carries out a suitability or appropriateness test must ensure that the investor understands the particular features of the instrument or product by providing “clear answers from specific questions presented to the client about the product features in order to confirm that the client is effectively aware of the features and risk of the product or instrument in question”.

The MFSA also imposed an additional requirement that such assessments of appropriateness and suitability of investments need to be signed by the client.

Unfortunately, not all investors seem to understand this obligation and many people who have called requesting information on the BOV offer were surprised at the level of information that financial intermediaries will need – especially given the requirement to answer a number of questions regarding the subordinated nature of these bonds and

the understanding of the bail-in mechanism. It is important for investors to recognise that without this information financial intermediaries cannot perform the duties expected of them by the regulators to be in a position to assist clients in their investment decisions.

In this circular, the MFSA reiterated that financial intermediaries “are required to ensure that clients are given all the relevant information in non-technical jargon such that clients are in a position to make an informed

decision with respect to their investment options”.

My article of last week was intended to assist in this respect and educate the retail investor accordingly. However, certain terms such as ‘subordination’ and ‘bailins’ are technical in nature and would still need to feature during discussions with clients.

As such, investors must be aware that when applying for the BOV subordinated notes on offer, they will be asked to undergo this question and answer test.

Finally, investors must also be aware that the application procedure for new investments has become a relationship-based service between the investor and the financial intermediary. Long gone are the days where an application form to participate in general public offerings could simply be completed, signed and submitted by mail.

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BUSINESS UPDATES

EVG-3D® Construction System exhibited by JMV at CHOGM Business Forum JM Vassallo Vibro Blocks Ltd’s (JMV) most recent investment involved the introduction of the EVG-3D Wall and Slab Panel manufacturing line, which is used exclusively in the manufacturing of the EVG-3D Construction System. The manufacturing line is being exhibited at the CHOGM Business Forum.

Established in 1969, JMV has focused its efforts over the course of nearly 50 years on the manufacturing side of the industry, providing local and international markets with a reliable and efficient supply of construction materials. Operating from a state-ofthe-art 20,000-square-metre complex in Żebbug, just minutes from the port, JMV has consistently invested in innovative steel

processing equipment including mesh welding equipment, rebar processing lines and steel section cutting and drilling lines to cater for the local construction industry.

It has always been JMV’s main objective to source materials of the highest quality available on the market and ensure that they conform to high standards. The group also operates an ISO 9001 Quality and Traceability System.

JMV Group has built a sterling reputation throughout the years and, as suppliers to major local contractors, their products have been used in the majority of local construction projects. For more information, call on 2146 7421, e-mail sales@ jmvi bro.com or visit www.jmvibro.com.

(FROM LEFT) HSBC MALTA CEO MARK WATKINSON MAKES A POINT AS DOUGLAS LIPPOLDT, MICHEL CORDINA AND HSBC HEAD OF CORPORATE BANKING KEVIN RAPINETT JOIN IN.

HSBC economist outlines reshaping of international trade corridors Global trade corridors and their long-term implications and opportunities were tackled by Douglas Lippoldt, a senior trade economist at HSBC, at an exclusive HSBC Commercial Banking Business Meeting.

Lippoldt spoke to the audience about the findings from his latest research Trade Chart Book – e Power of Corridors, published on September 15.

“From a quick review of our findings, the extent to which trade is dominated by the big three [US, EU and China] is striking.

But the increasing share of trade for emerging markets is notable. In some instances, one can readily discern China's interlinkages with its neighbours via global value chain production,” said Lippoldt.

“e examination of trade corridors shows that some countries, notably among the emerging markets, are not yet reaching their trade potential. Southsouth trade is growing but remains ripe for further development, provided that further trade liberalisation can be achieved,” added Lippoldt.

HSBC Malta’s head of commercial banking, Michel Cordina, said: “Mr Lippoldt brought to Malta in-depth insight of the world’s economic state of affairs. HSBC's global network allows it to capture emerging opportunities from around the world and to bring unrivalled insight to its customers so as to allow more informed decisions."

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BUSINESS UPDATE

Shop online with SendOn this Christmas SendOn gives one the opportunity to shop from online stores within the EU and US, particularly from those which do not ship directly to Malta.

SendOn continues to grow and besides its hubs in the UK and US, it can now give you an address in Germany and Italy. It has also upgraded its UK services by offering a standard service to complement the current priority service, allowing one to shop for items heavier than 30kg from EU online stores.

Thanks to these new hubs in Germany, Italy and the UK, one can shop for items of any size, from small electronics to heavy

furniture.

SendOn enables clients to: ■ Shop for items weighing up to 300kg within specific dimensions, from EU online stores using the UK (standard), Germany and Italy addresses; ■ Benefit from free delivery rates within the EU and US and very affordable shipping prices to Malta; ■ Benefit from an unlimited variety of items found on online stores; ■ Shop from the comfort of your home or office and have the shopping delivered straight to your door.

For more information, visit www.maltapost.com/sendon.

FIMBank organises educational Dining with a view at seminar for shareholders FIMBank recently hosted a seminar for its local shareholders in collaboration with the Malta Association of Small Shareholders, supported by the Malta Stock Exchange. During the seminar, participants were given an overview of the group’s global activities as well as the range of trade finance products and services it provides.

“FIMBank was one of the first listed companies to open its doors to the Malta Association of Small Shareholders. We are committed to the protection of shareholders’ rights and their equal treatment. We are also always looking to keep open, extend and diversify the channels of communication with all our shareholders, as well as ensuring that the wider community of Maltese shareholders is kept abreast of developments at FIMBank,” chairman John C. Grech said in his opening address.

FIMBank’s CEO Murali Subramanian expressed satisfaction at the high

De Robertis

turnout for this session: “Trade finance is a traditional business that is at the heart of global commerce. e expertise and focus at FIMBank on delivering client-specific solutions has given FIMBank a reputation of being a significant and important trade finance

provider globally and is now one of its distinguishing features.”

FIMBank plc is found at Mercury Tower, e Exchange Financial & Business Centre, Elia Zammit Street, St Julian’s STJ 3155; tel. 2132 2100; e-mail marketing@fimbank.com.

De Robertis is one of the largest established restaurants in Valletta. Located across the road from Auberge de Castille, the restaurant is well known for its refined cuisine at affordable prices. e open-air terrace dining area enjoys spectacular views of Valletta, the Grand Harbour and surrounding towns, providing a very romantic setting at night with the glimmering lights of towns beneath. e menu includes a fusion of Italian, Mediterranean, French, and local cuisine, all beautifully presented to patrons in a lavish way by our friendly staff, making De Robertis definitely one of the best venues for an informal business lunch or romantic dinner in Valletta. ey also cater for group lunches and staff parties with set menus, tailor-made for the client’s taste and budget.

De Robertis is at Castille Hotel, Castille Square, Valletta. It is open from Monday to Sunday from noon to 2.30pm and 7pm to 10pm. For more information, call 2124 3677/8 or 2122 0173, send an e-mail to info@hotelcastillemalta.com, or visit www.hotelcastillemalta.com.