Bob Diamond, one of the owners of Atlas Mara, the company that intends to take over ownership and total control of the pan African banking group, ABC Holdings Limited will be subjected to scrutiny by the central bank, Sunday Standard can reveal. The Bank of Botswana (BoB) has said that any person who intends to acquire significant shareholding, ownership and control of a bank and/or proposed to be a director of a licensed bank is subject to meeting its “fit and proper” criteria.
The BoB’s strict rule of ‘fit and proper’ test is applied mainly to new directors and senior management of banks operating in the domestic market. Apart from the person’s probity and competence, in allowing any appointment of directors of banks, BOB’s ‘fit and proper’ rule also looks at the person’s background, evidences, integrity, uprightness, and honesty. Diamond resigned from Barclays in July 2012 after the bank admitted that its employees conspired to manipulate the London interbank offered rate, or Libor, which is used to determine the interest paid on trillions of dollars worth of loans worldwide. In March, Atlas Mara ÔÇö founded by ex-Barclays chief executive Bob Diamond and African billionaire Ashish Thakkar ÔÇö announced that it would buy 50.1 percent in ABC Holdings Limited, which traded as BancABC in Botswana. The stake is likely to go up to 100 percent after the acquisition of African Development Corporation (ADC), a major shareholder in BancABC.
As a result, Bank of Botswana this past week indicated to Sunday Standard that consistent with the Banking Act (CAP.46:04), any proposal for a merger and acquisition involving a licensed bank requires prior approval by the central bank.
“Pursuant thereto, no significant change in shareholding, ownership and control of a bank can be effected without prior approval of the Bank of Botswana,” said the central bank last week.
Although BoB has made it clear that this transaction will go through its scrutiny, it has also said that it will not interfere with investigations carried by another regulator, the Competition Authority.
“The Bank of Botswana does not interfere in the decision(s) of any independent entity, such as the Competition Authority, in the exercise of its statutory mandate and powers”.
The bank has also indicated that it had not received questions from Sunday Standard contrary to what was reported in last week issue on the same matter. “The bank had not yet received your questionnaire.”, head of Communications at Bank of Botswana, Andrew Sesinyi clarified the matter this week.
Meanwhile a source close to BancABC said on Tuesday that Bob Diamond’s Atlas Mara is assured of getting regulatory approvals from the Reserve Bank of Zimbabwe despite strict regulations that are guided by the Indigenisation and Empowerment policy. The BancABC transaction also requires regulatory approvals in countries such as Zimbabwe, Zambia, Mozambique and Tanzania where the bank is also operating. By close of markets on Friday, BancABC cautioned its ordinary shareholders that: “The process of obtaining regulatory and other approvals is still ongoing. Shareholders are advised to continue exercising caution when dealing in the Company’s securities until a further announcement is made.”