7/31/2019 Testimony of Edgar Montanaro Gauci, former general manager, NBM

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TestimonyofEdgarMontanaroGauci,LP,formergeneralmanager,NBM...WhenthebanksrepresentativesmetatCastillethefirsttime,andtheprimeministerthreatenedtoclosedownthebank,thegovernoroftheCentralBankexclaimed:Itisinconceivable!Theprimeministersaidthatifthedirectorsandshareholderscontinuedtobedifficultregardingthetransferofshareshewouldwithdrawtheparastatalfundsandpassalawtosuspendthelimitedliabiityclause,sothatthebankwouldbecomebankrupt.HecontinuedtosaythathewantedtoremindtheshareholdersthattheyhadtoliveinMalta.Andifthebankwentbankrupthewoulddonothingtostopdepositorsfromgoingtothehomesofdirectorsandshareholdersandcarryingoffwhatevertheycouldfindtomakegoodfortheirdeposits.Thiswasaseriousthreatandtheprospectwasnottobetakenlightly,inasmuchasduringthecrisisof1958thereweretroublesandviolence.Thesameprimeministerhadrefusedtoassumeresponsibilityforupholdinglawandorder,somuchsothattheGovernorhadtointervene.Iamsayingthistoshowthatwewerethereforeveryworried,becauseweknewthattheprimeministerwouldcarryoutthisthreat..theviewthattheshareshadnovaluewasbasedsolelyonthesuspensionofthebankslicence,anddidnottakeintoconsiderationthebanksassetsandliabilities.Regardingthevalueoftheshares,onehastorememberthatthelicencewassuspendedjustforoneday,andthereforethevalueofthesharesreturnedtowhatitwasbeforethesuspension...Theultimatumwasthatunless,bytheevening,wewouldnothavehandedhimthebank,hewouldpassalawwhichwouldsuspendthesectionintheCompanyLawlimitingshareholdersliability.HetoldusDonotthinkthatyouhavetheshieldoflimitedliability,andifneedbehewouldalsotakefromusthepictureshangingonourwalls.