Nationalist Party leadership contender Frank Portelli owes HSBC Bank €11.6 million + interest accruing since 2015 Courts of Justice judgement

One of the two outsider candidates in the Nationalist Party’s upcoming leadership election, Frank Portelli, owes HSBC Bank Malta plc €11.6 million in capital and interest as at 12th January 2015, when the Courts of Justice ruled in the bank’s favour. In the two and a half years since, further large sums have been ratcheted up in interest on the original capital sum of €8 million.

For more than a year following the court judgement two and a half years ago, Dr Portelli avoided being served at his address with the judicial act instructing him to pay up. The Courts of Justice then ordered notification by formal publication, which means that the judicial act is affixed by court bailiffs to the individual’s front-door and published in the Malta Government Gazette. It was published in the Government Gazette on 3rd May last year.

The judicial act calls on Frank Portelli to pay to HSBC Bank Malta plc “within two days” the sum of €11.64 million and the interest accruing on it since the 2015 judgement in the Courts of Justice. The money is owed in respect of a loan of €7.1 million given to him for his business and left unpaid along with the interest of €3.57 million accrued up to 12th January 2015, and an unpaid overdraft of €1 million with accrued interest of almost a quarter of a million euros.

The interest continued to accumulate over and above that sum between the court judgement and the publication of the notice in the Government Gazette 16 months later. It has continued to accumulate since then as the Nationalist Party leadership contender has not settled his debt.

In the judicial act addressed to Frank Portelli, the Court Registrar describes the significant sum owing as “the amount you were repeatedly solicited to pay, but failed to do so”. Dr Portelli is also told: “To avoid useless Court costs, if the payment of the debt above mentioned is not possible and you need more time for monthly payments, you can admit your debt with the Bank by means of a notarial act. In this case you are advised that within fifteen days from the service of this letter you advise the Bank and engage a Notary”.

The “notarial act” described is what is known as a ‘constitution of debt’. When debts are left unpaid or payment programmes are not adhered to, the interest continues to accumulate as a separate debt, but the law does not permit interest to be charged on interest. The bank or other creditor therefore insists on the drawing up of a constitution of debt, which is a notarial document and therefore a public deed, in which the debtor admits to the total sum owing, of capital and interest, making the accumulated interest part of the actual debt so that interest can be charged on it from that point forward.

I do not yet have any information on whether Dr Portelli cooperated with HSBC Bank in this constitution of debt, but if he did, running a search on his name and/or The Golden Shepherd Group Ltd (company registration number C14948) will bring it up.

Nationalist Party leadership contender Frank Portelli