The Middlesea results and the company’s reporting are interesting indeed.

Extract from Middlesea company announcement to the Malta Stock Exchange of 30 April 2010:
“The Board is advised that technical requirements of IAS 27 provide that the results and balance sheet position of Progress should be consolidated in full in the Group accounts for FY 2009 on a line by line basis, and then de-consolidated in the FY 2010 accounts upon Middlesea “losing control” of Progress.”

The losses in 2009 and 2010 seem to indicate that Middlesea had lost control of Progress much earlier than in 2010.

What the media did not report, although this is disclosed in the above company announcement, is that the accounts have a “qualified opinion” from the auditors as the company did not follow “International Accounting Standards” by not consolidating Progress within the Middlesea group.

That is quite an important fact for a listed public company operating in the business of insurance.

What is more interesting is the statement by the auditors that “due to the fact that Progress has now been put into Compulsory Administrative Liquidation, the Group does not have access to the necessary information to enable it to account for its 2009 financial statements.”

Does that mean that Middlesea management was not allowed to carry out an audit of Progress? If not, how can the management be sure of what went on at Progress in 2009, its losses and its financial situation?

The public reporting by the company so far gives rise to these and other questions.

You once told me, don’t get emotional about stock. Don’t! The bid is 16 1/2 and going down. As your broker, I advise you to take it.

Tajjeb. Share prices of Middle Sea remained the same while those of BOV went down.

When they did venture, the client base they chose was one where all the ‘good risk’ continued to be given to the Italians and the ‘bad risk’ business dumped on Middlesea.

By the time they realised their premium-to-claims ratio was heading rapidly down the toilet, it was too late. I hope for their shareholder’s sake that their reserves permit them to ride out the storm.

MIddle Sea is a really good story for any financial writer worth his or her salt (no, they do not exist in Malta). Their disastrous loss caused by operating in southern Italy (an area that very few insurers dare venture into), an ex-chairman who operated in the true Mintoffian mould, board directors appointed as a result of old favours and so on.

The financial writers seem to have a pact to keep mum about the story, and in spite of one of the biggest losses ever suffered by a Maltese public company in one year, barely anything is said. What is even stranger in this weird country is that the share prices of Middle Sea remained the same in spite of the announcement.

Why should the loss reported by a private firm be of interest more than the losses of public corporations? Are you by any chance insured with MiddleSea?

[Daphne – No. I am insured with GasanMamo. It interests me because it is a business story and I like business stories. The purchase of a power station I find boring – that’s just me. I find the annual government budget boring, too. In fact, if you analyse the reactions, you’ll see that most people are like me – they find it boring, too. That’s why the Opposition is playing up the corruption angle, to work up interest through titillation. They know there’s no way they’re going to get people going on the basis of heavy fuel oil, prototype technology, etc. Remember that I am not a staff reporter, paid to go through the news. My job is to comment on what I find interesting, end of story. And it’s not my full-time job, either. Middlesea is NOT a private company. It is a public company and has reporting obligations. It has fulfilled the basics of reporting, but I’m surprised the matter hasn’t been taken up by financial writers. An impairment charge of EUR64 million? In a public company?]

Regarding what is discussed in this article:

Notwithstanding the fact that Vella Haber provided jobs for his immediate family at ONE, I think he did a good job for One TV in promoting Maltese drama and other talents etc. Just in case you were wondering, by ‘talents’ I don’t mean Singled Out.

Net news stated this evening that Joseph Muscat spent last Wednesday mediating between Vella Haber and Jason Micallef. Should the Labour party have been in government, would Joseph Muscat have spent a whole day, as a prime minister, solving issues in his party’s media organisation?

Haber is a dentist.

The “quality” of the local press never fails to amaze me. The MiddleSea debacle is surely a story which deserves to be investigated thoroughly by the press and yet all we get is bland reportage of the chairman’s statement.

Why doesn’t someone try to understand what happened in MiddleSea’s Italian venture and how they managed to make a complete mess of it? Even the fact the previous chairman resigned quietly hardly caused a ripple in the press.

Given what has happened in the financial crisis globally, surely the implosion of Malta’s main insurance company deserves a lot more clarification.

On a similar note, I’m amazed that till today everyone in the country seemed to be asleep at wheel as Greece blew up and nobody bothered to ask what the implication for Malta might be, not to mention the cost to the taxpayers.