Welcome to the e-malta.com Holiday and Information Centre for Europe & the Mediterranean
Information on Maltese Banking
The BICAL saga in chronological order as per the Malta Today
An overview of some of the relevant dates and events
1962 - Brothers Henry and Cecil Pace open the BICAL bank. They are the shareholders and directors of innumerable companies spanning the whole economic spectrum - shipping, hotels, finance, manufacturing and motor vehicles. Cecil Pace is one of Malta’s foremost entrepreneurs. Together with his brother, the BICAL bank and its associated companies employ 3,300 workers. Even Dom Mintoff, Labour Prime Minister between 1955 and 1958, and later from 1971 to 1984, acknowledges Cecil Pace’s status. In the late fifties, with Cecil Pace on tow as a business representative, Mintoff would introduce Pace as a "successful industrialist," when on trips abroad to promote Malta.
1970 - Central Bank (CB) inspectors identify BICAL as being in a bad situation and exposed to great risk due to a shortage of liquidity, excessive loans beyond the bank’s means. The inspectors contend that these loans were concentrated on a small number of industries in which the president and one of the directors of BICAL had major interests, a practice not in conformity with banking practice. The CB report is corroborated by accountants Cooper Brothers Ltd, who suggest the appointment of a controller to regulate the bank’s dealings.
1971 - Labour is returned to power. Finance and Customs Minister Guze Abela gives orders for the immediate examination of BICAL affairs by Central Bank inspectors.
November 1972 - Cecil Pace gets to know through Hambros Bank that the credit limit in BICAL’s account of 360,000 pounds has been exceeded. Baffled, Cecil Pace calls for one of his managers: Lawrence Cachia Zammit, brother of former PN Health Minister Alexander ‘Sandy’ Cachia Zammit, and also treasurer of the Nationalist party. He admits to having made unrecorded foreign transactions of up to 360,000 pounds sterling, which were allegedly made to pay for printing equipment purchased by the Nationalist party apart from other personal payments made by Cachia Zammit in the expensive pastime of keeping racehorses. The bank appears to have never been repaid by the Nationalist party for the disbursements of foreign payments made through the Hambros bank. Cachia Zammit had in fact written a letter confirming the discrepancy of funds, and offering to make up for the missing funds by personally transferring property to Cecil Pace’s companies.
November 20, 1972 - Cecil Pace receives a telephone call from Robert (Bobbie) Stivala, Guze Abela’s private secretary. At 9.45 pm, Cecil Pace, accompanied by his lawyer Albert Ganado, drove to the Finance Ministry. The writing was on the wall, and Bobbie Stivala did all the talking: "From this time on, your bank is no more, I suggest you co-operate fully with the Central Bank." In the following days, BICAL encounters a run on its reserves. Guze Abela, Finance Minster, is one of the many depositors who make sure they withdrew all their monies from BICAL before the appointment of a CB controller to take over the bank - according to Cecil Pace the amount is Lm5,000, certainly no coincidence.
November 25, 1972 - A DOI statement announces the bank is to be closed for a time to allow for talks with the Finance Ministry. Central Bank manager RJA Earland appointed Controller.
November 28, 1972 - Karmenu Mifsud Bonnici is appointed BICAL controller to take over the bank’s and its associated companies’ assets and sell off as much as is needed to clear all the bank’s and its companies’ debts and liabilities. With his bank under control by Mifsud Bonnici, Mintoff’s right-hand man, Cecil Pace learns much about the motivations behind the closure of his bank. He cannot understand why the evident surplus of assets over liabilities threatens the closure of his bank.
January, 1973 - Two messengers bring home the reality behind the closure of the bank: at the newly-opened Excelsior Hotel, Justice Minister Anton Buttigieg candidly asks Cecil Pace whether he would consider taking on Mintoff as a business partner. Buttigieg suggests to Cecil Pace he transfer part of the bank that was later to be closed down, to Mintoff’s nominees. In return Cecil Pace would have the possibility to open new branches and to take over government accounts.
Cecil Pace had already been asked to accept to become deputy leader of the Labour party by Mintoff. An employer of 3,000, and a popular personality, Pace had the ability to garner great support for the MLP. "Not being politically minded, I rejected the offer. Soon I was approached again, this time with the proposal to sign away half my equities to nominees and be rewarded with ‘choicy’ contracts for my companies whilst my bank would be handling Government accounts and permits to open branches all over the island," Pace says.
January 5, 1973 - KMB asks Cecil Pace to sign the deal with Mintoff, or else face the consequences. The next day on 6 January 1973, Cecil Pace waited for the police to arrive, to be taken to Kordin.
October, 1977 - Following four years of imprisonment and house arrest, Cecil and Henry Pace are convicted for misappropriation, fraud and forgery. Cecil is sentenced to 14 years, and his brother 9. According to a Court registrar overhearing a telephone conversation between the presiding Judge and Dom Mintoff, it is Mintoff who gives the blessing for the maximum sentence allowed.
1985 - Cecil Pace is released from prison. He now has to face Karmenu Mifsud Bonnici then Prime Minister of Malta, appointed by Dom Mintoff himself. Cecil and Henry Pace initiate a series of legal proceedings into the mishandling of BICAL and its companies and the apparent reticence of Controllers to pay off the depositors at the BICAL bank.
November, 1995 - Parliament passes a law which grants immunity from prosecution to the BICAL Controllers, which stops the Pace court actions from being heard in Court and transferred the cases instead to a tribunal presided over by a Finance Ministry-appointed lawyer.
2003 - Fresh new allegations into the political intrigue behind the closure of BICAL are revealed in MaltaToday. Around 20 per cent of BICAL depositors remain to be paid, but the bank is still under control. BICAL Controllers are revealed to have squandered hundreds of thousands in BICAL monies to pay for their services, estimated to amount to over Lm2 million in 30 years. Cecil Pace, now 73, is still fighting for the recovery of BICAL monies to be given to the rightful depositors and the release of his companies from control.
The Anglo Maltese Bank was set up with Lm1 million Maltese Scudi, divided into 200 shares of 5,000 scudi each. The offices were in the 'commercial rooms' of 113 St.Pauls Street Valletta, and its first President was William Higgins, an Englishman, and John Vella the first cassiere (General Manager).
The Banco di Malta was set up in 1812, with the same capital as the Anglo Maltese Bank. The first President was George Thomas Jackson and Vice President was Sir Agostino Portelli who founded the Chamber of Commerce in 1848. Other notable shareholders were Onorato Bres (historian) Vincenzo Borg Brared, Maltese patriot. Its offices were at 59 St.Domnic Street Valletta.
Soon after they were set up, both Banks started to issue their own promissory notes, first issued in Scudi and later sterling.
1812 The third Bank was also established B.Tagliaferro et fils and wholly owned by Biagio Tagliaferro, a Genoese merchant. Its offices were at 106 St John Street Valletta. Apart from Banking it owned a number of ships for the transshipment of grain from Crimean ports.
1830, Joseph Scicluna et fils. the 4th Bank was set up, owned wholly by the family of merchants and its offices were at 122 Old Theatre Street Valletta.
1857 the Anglo Maltese Bank and the Banco di Malta moved their offices to the ground floor of the new Exchange Buildings at Republic Street (Kingsway) Valletta.
1926 Joseph Scicluna et fils becomes Sciclunas Bank
1946 In January of that year the two oldest Banks, the Anglo Maltese Bank and the Banco di Malta amalgamated under the name of National Bank of Malta. Commandier Antonio Cassar Torregiani OBE as the first Chairman.
1949 Sciclunas Bank affiliated to the National Bank to form the National Bank of Malta Group
1969 B.Tagliaferro & Sons trading as Tagliaferro Bank Ltd merged with the National Bank of Malta. Tagliaferro Bank and B.Tagliaferro and Sons held 30% shares of the National Bank of Malta.
1973 National Bank Group faces a run on the bank. The Central Bank refuses to act as a lender of last resort and blocks Barclays and other banks from supporting the Group. The Government of the day, in a scandal marking Malta's Banking history, wiped out a whole generation of Banking history by forcefully taking over the business of the Bank, and assuming it's business and Assets with no compensation to its shareholders (274 shareholders). The National and Tagliaferro Banks Act 1973 was passed. On the dark day 22nd March 1974 the Bank of Valletta took over business with Lm43 Million in Assets, 27 Branches and after 9 months, a miraculous Lm1 in profit.
1974 The Maltese Government establishes BOV (Bank of Valletta) to take over the business of the National Bank of Malta. BOV sells 9.6% of its shares to the Maltese public.
1975 BOV sells 20% of its share capital to Banco di Sicilia.
1976 BOV acquires the National Bank Group's assets and liabilities
1987 BOV opens an office in London.
1990 BOV issues 4,900,000 ordinary B shares to the general public, which brings the public’s ownership to 28.2% and so the Government reduced its stake in the Bank of Valletta to 51.2%
1995 Government sold another lot of shares to the public is privatized after Government sold 12,000,000 shares to the public, thus reducing its stake from 51.2% to 25.2%
2007 - 274 shareholders still waiting for compensation and a proper court trial to conclude its finding.
The parcel bomb received by Philip Cini on 22 December, revived memories of another tragic day, when, on the 28th of December, Karen Grech, 15, was killed by a letter bomb addressed to her father Edwin.
The small parcel addressed to Prof Edwin Grech, was received whilst the Maltese doctors were on strike.
Prof. Edwin Grech and Dr Paul Chetcuti Caruana , despite this action, and in spite of the immense pressue created by fellow doctors for them to ignore their duties and cave in, had chosen to continue carrying out their duties within St Luke’s hospital
Dr Chetcuti Caruana, who had also received a letter bomb had immediately notified the police before another tragedy could have occured.
The Karen Grech murder has remained shrouded in mystery, despite former Prime Minister Eddie Fenech Adami's pledge in parliament way back in 1985 that a Nationalist government would solve the case. When we’ll govern, we’ll investigate … he had stated.
Despite this statement, the case remains unresolved, with Edwin Grech stating in an interview with newspaper Illum in 2007, that he had lost faith in the investigations.
I’m asking for a serious investigation, he had said. All I want is justice but I’m sure that there is someone who does not want it.
No political will
Nov 30, 1986: A PN mass meeting in Zejtun is blocked by police and Labour activists. A round of machine gun fire is traced to a Sterling submachine gun.
Dec 1, 1986: On their way to Zejtun, a group of Labour supporters drive past the PN’s club in Tarxien and spray machine gun bullets at the closed club door. One of the Labour acolytes allegedly involved is Anthony Carabott (it-Toto). The bullets were also fired by a Sterling submachine gun.
Dec 5, 1986: Raymond Caruana and other PN activists are sitting in the PN’s new club in Gudja, watching TV. The club door is open and the lights are on. At around 11 p.m., at least one car drives past and 13 shots are fired. One of the bullets hits Mr Caruana in the jugular vein. He dies almost instantly. The shots are from the same machine gun used in Tarxien and Z.ejtun earlier that week.
Dec 6, 1986: Anthony Carabott, Michael Spiteri and Edwin Bartolo are brought in for police questioning. Forensic tests reveal minute particles of gunshot residue in their hair, but no particles are found inside Mr Carabott’s Land Rover.
Dec 11, 1986: Police raid the farm of Pietru Pawl Busuttil, a local farmer and PN supporter, claim they’ve
found a Sterling submachine gun hidden in his barn and charge him with Caruana’s murder. But the courts
soon find that Mr Busuttil has been framed by police, exonerate him and eventually award him Lm40,000
(Euro93,000) in damages.
Dec 24, 1990: Nicholas Ellul (ic.-C.aqwes) is identified as the owner of the Sterling submachine gun.
He is charged with the murder of Caruana, but is not held on remand and his testimony is never heard.
Mr Ellul dies of an overdose in 2001.
Feb 3, 1997: G.anni Psaila (il-Pupa) testifies in court that Karmenu Farrugia (il-Botom) had fired at
the PN club in Tarxien. Mr Farrugia, who was a ministerial driver at the time, denies the allegation.
Mr Psaila dies later that year after allegedly falling down a shaft while carrying out a burglary.