Candidates battle it out for support

by David Kelleher

The ‘battle’ for shareholders’ votes to re-elect Maltese directors to the board of directors at HSBC Bank (Malta) is heating up with the five candidates standing for election calling for support.
With less than three weeks to the 28 March election, the five candidates have either taken on a direct, confrontational style or else canvassed for support through letters to shareholders in HSBC Bank (Malta). On Tuesday, one of the candidates published a letter sent to him by an association representing small shareholders asking him to pull out in favour of another candidate being proposed by the association.
The five candidates standing for election are Louis A. Farrugia, John Borg-Bartolo, Peter Paul Testaferrata, Victor Scicluna and Rueben Bonello.
On Tuesday, Mr Bonello released to the media a letter sent to him by the Association of Small Shareholders asking him to rescind his nomination and to allow the association’s preferred candidate, Mr Borg-Bartolo, to stand for election.
HSBC has a total of 3,860 shareholders, of which one shareholder HSBC owns 70 per cent. The remainder is held by small shareholders. The board in theory should have six members representing HSBC and the other shareholders three.
The Malta Business Weekly spoke to Mr Louis A. Farrugia, Group Chief Executive of Simonds Farsons Cisk plc, to get his views on the election and why he was bidding for another term on the HSBC board of directors. “I am asking to be re-elected because I feel I have something to offer. HSBC is a public listed company and I myself am managing director of a public listed company that has done well. Like HSBC Malta plc, our own standards of corporate governance are excellent and our reputation in the market is evidence of this,” Mr Farrugia said.
He added that a mix of local expertise along with the foreign directors was essential. “I firmly believe in team building and I have some experience of this – after 20 years as managing director of a company – I feel I can contribute to the success of the bank,” Mr Farrugia said.
The battle for election has also brought on harsh words against the HSBC Bank (Malta). In a letter to members of the Malta Shareholders Association, Mr Borg-Bartolo claimed that HSBC Bank had used “somewhat unethical tactics” and that the bank was trying to elect persons of its own choice.
Mr Farrugia would not comment on what was other candidates have been saying in the media, however he said the board of directors had the right mix of local and foreign expertise to work on behalf of all the shareholders. “This balance on the board – local knowledge and foreign banking expertise – is essential. All directors are equal and all act in the name of the shareholders. There is no majority or minority,” Mr Farrugia told The Malta Business Weekly. “It is not a question of ‘them’ and ‘us’. We are all in the same boat, working in the interest of all the shareholders, the interests of the bank, and ultimately, the economy,” he added.
With regards to the alleged ‘controlling’ power of the foreign directors, Mr Farrugia denied that he was told what to do. “I am my own person and not controlled by the majority shareholder. People who know me can vouch for that,” he said.
He has written a letter to shareholders calling for their support in his bid to be re-elected to the board of directors. “HSBC has a lot to offer and will continue to improve banking practice here in Malta. There are numerous opportunities for investors and also for the staff. I am a firm supporter of their presence here in Malta. However, I am also a firm believer and supporter of anything Maltese. I run a Maltese-owned company that produces Maltese products. My first interest is naturally in Malta,” Mr Farrugia said.
“I firmly believe that all shareholders stand to benefit. The directors’ main aim is to see the bank grow and so increase shareholder value. The small shareholders are respected in every sense. In fact, the bank has held a number of shareholder meetings throughout the year to explain how the bank is operating. It did not wait for the annual general meeting to do so,” Mr Farrugia added.