FirstRand identifies potential buyers for troubled
Johannesburg - FirstRand had identified 60 potential buyers for troubled subsidiary Ansbacher and hoped to enter discussions with them before the Christmas break brought business to a halt, Johan Burger, the chief financial officer of FirstRand, said yesterday.
At least 88 buyers had expressed an interest in Ansbacher despite the UK merchant bank's colourful past. The prospective candidates were carefully screened by the bank to ensure clients would not suffer and FirstRand's credibility be harmed because of the sale.
Ansbacher's net asset value is about £100 million
'At least 88 buyers had expressed an interest in the UK bank despite its past'
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Ansbacher was bought in 1993 by First National Bank, which FirstRand acquired in 1998.
Ansbacher became embroiled in controversy after an inquiry ordered by the Irish high court in 1999 found that customers of Ansbacher - which operated in the Channel Islands, the Cayman Islands and the Bahamas - were allegedly involved in tax evasion from the 1970s to 1996.
The net asset value of Ansbacher Cayman was $14 million, which would be reduced should any claims against it by Irish tax authorities be successful, said Laurie Dippenaar, the chief executive of FirstRand.
Current claims against Ansbacher Cayman would be ringfenced so that a successful buyer would not be faced with future liabilities should any of these claims materialise.
Ansbacher has about 5 800 high net-worth clients, which prospective buyers would like to add to theirinfrastructure, he said. Companies were not interested in acquiring the brand.
The management of the UK-based operation wanted to embark on an expansion strategy outside South Africa, which FirstRand was not willing to back as it wanted to focus on Africa and South Africa, where return on equity was much higher than internationally.
Ansbacher has been an uncomfortable fit in the FirstRand stable and has continued to disappoint despite a massive restructuring of the business.
An application by Barry Spitz, a banking, tax and currency law expert of the International Law & Tax Institute, to halt the sale of Ansbacher was dismissed last week by the Pretoria high court. Spitz, who was hired by FirstRand as a consultant in February 2000, is suing the group for 7.5 percent of the gross revenue of RMB Private Bank for commission he claims are owed to him.
The matter - in which FirstRand had lodged a counterclaim against Spitz for damages resulting from non-performance - was expected to go to trial sometime next year.
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