The beleaguered former banker Rajan Mahtani seems to not be having a very merry Christmas, as the sale of his business Finance Bank of Zambia Ltd to Atlas Mara for a reported $60 million plus shares has hit a stalemate and may not proceed, according to a source with inside knowledge.
Although the sale agreement was formally announced this past November 2nd, nothing has been signed yet and the transaction has not yet been executed, allegedly due to underhanded maneuvers by Mahtani to misrepresent shareholders, assets, and other critical issues before Bob Diamond, the head of Atlas Mara, the source says.
“Atlas Mara was hoping to quickly roll out the rebranding all the branch locations of Finance Bank to BancABC in January, but this will not be taking place because of the stalemate, causing frustration and impatience among the prospective buyers,” the source said.
Among the most problematic area of the stalemate was Atlas Mara’s discovery that Mahtani had not even consulted other shareholders such as Credit Suisse and Clarkwell Ltd., who are now refusing to sign off on the deal, the source alleges.
“This is the end of December and the bank was supposed to have been sold months ago, so you would expect signs of everything shutting down and transferring to the new management, but this has not been the case,” said the source. “Mahtani is still working full time and has no intention of ever handing over that bank. The purported sale was just used to raise the Bank’s reputation so that it could be bought by international investors.”
In the past, Mahtani has used similar tactics to raise interest in the bank by repeatedly announcing numerous initial public offerings (IPOs) which never materialised.
If Atlas Mara were to fail in this acquisition of Finance Bank, it would represent a debilitating setback for the banking group which has come under fire from disappointed shareholders. In an interview with Bloomberg, Zoran Milojevic, an analyst at Auerbach Grayson & Co., described Atlas Mara as “a hodge-podge mismatch of questionable investments at questionable prices.”