10 - 16 February 2000

Battle rages for HSBC minority directors

by Anthony Manduca

Lobbying by HSBC Bank Malta plc as well as the Association for the Minority Shareholders of HSBC in connection with the election of three directors representing minority shareholders is believed to be in full swing.

Four nominations have been submitted to fill the three directorships available for election by minority shareholders on the board of HSBC Bank Malta Ltd at the forthcoming annual general meeting on 15 March 2000. The four candidates are Joe Gerada, who is seeking re-election as a director, Louis Farrugia, managing director of Simonds Farsons Cisk, Mario Testaferrata, the owner of St George's Complex, and John G. Borg Bartolo. Mr Borg Bartolo has the official backing and support of the Association for the Minority Shareholders of HSBC Bank Malta plc while the other three candidates are being supported by the majority shareholder. Two of the current directors representing the minority shareholders have decided not to seek re-election.

A statement issued by the Association for the Minority Shareholders of HSBC said Mr Borg Bartolo is an experienced retired banker and a founder member of the association. It said that in his professional career Mr Borg Bartolo held top executive positions with Barclays Bank, the Central Bank of Malta and the Malta International Business Authority (now renamed Malta Financial Services Centre).

The association reminded shareholders of the achievements it has accomplished in its mission to defend the interest of minority shareholders. "The latest achievement is the step taken by the Malta Stock Exchange to abort a delisting attempt by the majority shareholders if this is objected to by five per cent or more of the minority shareholders."

The association said that its effective and energetic defence action put up on behalf of the minority shareholders had helped to add value of around Lm50m to the 30 per cent held by minority shareholders. "Whereas the majority shareholders offered Lm2.90 to buy these shares from minority shareholders last summer, these shares were recently trading as high as Lm7.50," it said.

The association said it was aware that the majority shareholder is promoting the candidature of the other three contestants and is showing "unethical attempts to thwart the free choice of minority shareholders". It said attempts by senior officials of the bank to lobby votes in favour of the other three contestants were understood by some shareholders as having the blessing of the association which has defended their rights so successfully.

The association appealed to private minority shareholders to understand that their interests are often diametrically opposed to that of the majority shareholder. "It is therefore important to vote for Mr Borg Bartolo as the candidate officially endorsed by the association. This would guarantee that their voice is heard where it matters," it said.

The association said that it would be writing to each shareholder with more information.