BICAL - An exercise in destruction
In the aftermath of the suspension of the BICAL licence,
there follows the ruthless dissipation of the BICAL assets. Central
Bank controllers entrusted with selling off enough assets to cancel
all debts associated with the BICAL bank and its debtors the
so-called BICAL associated companies, of which the Paces were
directors and owners literally proceeded to render the BICAL
Million-lira investments, hotels, businesses, property and so many other
thriving business organisations of the BICAL empire literally dissipated
for little or no money at all, at the mere whim of the BICAL controllers
Karmenu Mifsud Bonnici and Emanuel Bonello.
Whilst KMB is revealed as having been naïve in his handling of
the BICAL assets - removing assets for nothing, selling off at ridiculous
prices, not keeping accounts of receipts or never actually collecting
payments Bonellos tenure is one in which endless amounts
of money are withdrawn from the BICAL assets for administrative expenses,
and for the exercise of compiling the accounts which KMB never kept.
On the other end of the stage, looking in from the side-curtains, Cecil
Pace, 73, released from jail in 1985 after a total of fourteen years
in jail and house arrest, fights for the release of BICAL deposited
monies to be returned to the depositors who lost their rights when the
bank licence was suspended in 1972. So far, 20 per cent of depositors
still await the money they had with the bank before that fateful 25
November of the BICAL closure.
Whilst Pace has yet to wait until 1977 for his sentence, he spends four
years under house arrest, and intermittently in jail. Even under house
arrest, Pace has been stripped of all his rights over the BICAL bank
and its associated companies. He watches first hand as his crown jewels
are all dissipated under the negligence and irresponsibility of controller
Karmenu Mifsud Bonnici.
In one of the first events in which Pace is to encounter the fate of
his companies wealth, KMB visits him in jail, where he had been
kept briefly before being sent under house arrest.
It is eleven o clock in the night and KMB pays a surprise
visit to Cecil Pace. He tells Pace that he has found a buyer for his
entire fleet. Pace enquires on who is the buyer and what has been the
amount negotiated. But KMB refuses to divulge details. He threatens
Pace into signing, but Pace is undeterred. He is already in jail and
suggests to KMB there is enough place for him. The next day Pace discovers
through his lawyer that KMB planned to sell part of his fleet to the
fledgling Sea Malta for a couple of tens of thousands. "I refused
to sign off my fleet in that manner," Pace said. "When I was
under house arrest I made contacts myself to find some buyers for the
fleet. The fleet was eventually sold for a better price, but without
my consent. Since that refusal I would never sign anything else having
to do with my companies assets."
But in 1973, Cecil Pace had already started tasting the vindictive style
of the controllers who took over his empire: The ship "St Rule"
was sold for a ridiculous Lm4,800 in 1973, whilst the "Maltese
Trader" was sold for just Lm14,500. The yachts "Comino",
"Verdala" and "Maria Louisa" - valued in excess
of Lm90,000 - were sold for a measly Lm7,400. The motor yachts "Roberta",
"Michael", Celia" and "Sayonara Hago" were
sold as a going concern in 1976 to John Sullivan's Sunsea Cruises Ltd
for the fine sum Lm39,500, despite having a value of over Lm100,000.
When Sullivan paid the initial deposit of Lm20,000 for the boats, Karmenu
Mifsud Bonnici never bothered to collect the remaining Lm19,500. Only
in 1987, was Sunsea Cruises ordered by the Commercial Court to repay
the outstanding amount plus interest, and to this day no controller
has ever told the Pace family whether the money was actually paid or
This was yet another angle to the ludicrous attitude taken by the controllers
who led everyone to believe that they were dealing with bankrupt companies.
One of the easiest victims of the controllers wrath was certainly
BICAL Banks main headquarters off Zachary Street, which had been
bought for free for the princely sum of LM35,000 back in 1962. More
than a decade later these premises were given to Mintoff's peoples
bank - Bank of Valletta - for nothing.
Another case in point of KMBs ruthless dissipation of BICALs
assets was Skylim, a property development company of which MIDC, a BICAL
company, had a 50% shareholding. Sklyim owned property in Kappara, Naxxar,
Hal-Lija and twelve apartments in a block of 24 in Marina Str, Pieta,
which also housed Carways Ltd, the holding company for Cecil Pace's
automobile agencies, which included Mazda, Lotus, Honda and BMW amongst
The controllers progress reports for 1972 until 1988 confirm that when
Skylim was seized in 1972 as part of the BICAL associated company holdings,
there had been no overdraft or loan from BICAL or other banks, but a
substantial credit in its current account with BICAL.
In 1975 however, Karmenu Mifsud Bonnici, Mintoff-appointed controller
and later his chosen replacement for leading the Labour government,
literally got rid of Cecil Pace's 50 per cent shareholding in Skylim
for the paltry sum of Lm30,000.
The amount barely covered two loans Skylim had with two other BICAL
companies (Universal Investment Ltd and Maltese Properties Ltd) and
personal loans from Henry and Cecil Pace.
He gave the two other shareholders in the company Architect Eric
Mamo and Grech & Co Ltd (each holding a 25% shareholding) - a Kappara
Villa and the Pieta apartments, as well as Lm15,000 in the current account.
As for MIDCs 4,999 shares, each worth Lm1, Mifsud Bonnici got
rid of them for just the nominal sum of Lm2. Cecil Pace was delivered
blow after blow of wanton destructive treatment of his assets: "This
quality of administration on the part of the controllers was typical
of every sale of assets and debt collection," Cecil Pace insists,
"The potential of this property was so big, which as Mamo and Grech
said in their testimony, that one of the apartments had been sold for
Lm32,000 some years ago. We had 12 of those apartments. Instead of acquiring
the value of the apartments, the controller collected only part of the
loan to Skylim. The controllers never took any interest in the sale
of the assets except so as to remove the BICAL group's assets even by
transferring property away for nothing or for little at all."
An exercise in disbelief VIP Ltd
The Pace family had invested Lm400,000 in the Comino Hotel on the island
of Comino, which carried an emphytheusis for 150 years at Lm12,000 a
year. When the company was seized, the hotel was valued at over Lm1.5
In order to dispose of the annual rent of Lm12,000, Karmenu Mifsud Bonnici
decided, in an unprecedented action of bizarre logic, to return the
Comino Hotel for free to its landlord John Gaul, the British millionaire
who owned Comino. Removing the hotel without any form of recompense,
Mifsud Bonnici lost an investment of hundreds of thousands of liri and
the rest of the hotel's potential.
It was ironic that it was in fact Karmenu Mifsud Bonnici, then lawyer
to a French man named Valliere, who encouraged the Pace family to buy
the hotel from John Gaul's former wife, who had then partnered up with
This was another case of the controller removing all the BICAL group's
wealth without any attempt being made to safeguard the interests of
the shareholders and creditors as he was obliged to do in his role.
At no stage were the Paces ever consulted about this transaction.
John Gaul no novice in making profits, disposed of the hotel some weeks
later for the reported price of Lm2 million and Lm50,000 rent a year.