In a surprising decision handed by the Appeals Court earlier today, the compensation awarded to the previous shareholders of the National Bank. was slayed from €111 million to €71 million. The decision has not yet been uploaded online but a report about it has been published by Times of Malta. The previous shareholders demanded up to €1.4 billion – equivalent to the market cap of Bank of Valletta.
In a historic case which took decades to be adjudicated, the previous shareholders argued that the government had illegally expropriated their shares in 1974 when it expropriated the bank to create Bank of Valletta. The National Bank had severe liquidity problems due to excessive exposure to the real-estate-market which was going through a significant bust. The bank also invested in properties and projects owned by the shareholders themselves.
Ex-shareholders can chose to take the compensation sum or take their case to Brussels at the European Court. The compensation will be issued by the government and Bank of Valletta will not be affected.
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