Bob Diamond, one of the most controversial bankers to emerge from the financial crisis and the man ousted as boss of Barclays after a direct intervention by the Bank of England, is making a dramatic return to the City with the launch of a new Africa banking business.
The financier once dubbed the "unacceptable face of banking", is attempting to raise $250m (£153m) by floating a fund on the London Stock Exchange within the next two weeks – he plans to use the proceeds to buy a stake in an African bank with a presence in several countries across the continent.
As part of the deal, Diamond is teaming up with an African entrepreneur called Ashish Thakkar, the 32-year-old chief executive of Mara Group, a conglomerate with "technology, manufacturing, real estate and agriculture" interests in 19 African countries. It is anticipated that both men will sit on the new public company's board.
Diamond's choice of London to float his first major banking venture since leaving the City will surprise many, even though it is thought to reflect London's supposedly better ties with Africa, compared with Wall Street. One London-based banking source said: "It reflects the knowledge of Africa here, plus the time zone".
However, returning to the City will not be without its inconveniences – as even Diamond's friends admit his reputation is lower in Britain than almost anywhere else in the world.
Diamond's name is still widely associated with some of the more emotive events of the financial crisis, as he was frequently criticised for the level of his pay and an aggressive attitude to business – even before the scandal over the fixing of the benchmark interest rate, Libor, forced him out of Barclays. In 2010 he was memorably dubbed the "unacceptable face of banking" by Lord Mandelson after it emerged that he had received cash and share awards that could net him £63m.
However, his downfall came in July last year, in the face of relentless pressure from politicians and regulators for him to go following the interest rate manipulation scandal which resulted in Barclays being fined £290m to settle claims that it used underhand tactics to try to rig financial markets.
Marcus Agius, Barclays' then chairman, and Sir Michael Rake, the bank's most senior non-executive director, were summoned to see the then Bank of England governor Lord King, where they were told that "Bob Diamond no longer enjoyed the support of his regulators".
That stain on the banker's reputation has been tricky to shift and it emerged last week that Diamond is to be called as a witness as part of Guardian Care Homes' £70m suit alleging Barclays mis-sold it interest rate hedging products based on Libor.
Quite how his return to banking will be viewed in Africa is unclear, as Barclays' own Africa business was forced to launch a charm offensive following the Libor fallout. However, sub-Saharan countries appear to be attractive investments for bankers, as only a quarter of the population is said to hold a bank account.
The financier has also made no secret of wanting to invest in Africa, where his family foundation is active. He recently met senior officials in Nigeria, which helped fuel rumours he might be looking at one of the country's troubled banks.
Diamond will be assisted in his latest project by the British-born Thakkar, who moved to Rwanda with his family when he was 12, before the family fled the Rwandan genocide to Uganda. He has said he started selling computer equipment to friends and his school in Kampala and built his business up into what became Mara Group.
The new London-listed vehicle will be called Atlas Mara – after Diamond set up a company called Atlas Merchant Capital in New York this year as an old-style merchant bank that is looking to sign deals with partners.
The pair's plan to raise money via a publicly-quoted cash shell with the purpose of buying assets in emerging markets is a controversial one. It is not without successes, but the reputation of such structures has received a large knock-back over the past couple of years with the corporate governance woes of Bumi Plc, an Indonesian mining firm created from a shell launched by the financier Nathaniel Rothschild.
Despite Diamond's reputation, the banker did leave the City with some supporters. He is widely credited with building Barclays' investment bank – Barclays Capital – which was an insignificant institution when he joined the firm in 1996.
Within a year it had merged with the fund management and trading arms of Wells Fargo and Nikko Securities and its stellar growth meant it provided an increasing chunk of Barclays' overall profits, which had previously come from more traditional lending.
Also, while Barclays was the first bank to be fined for Libor manipulation, Royal Bank of Scotland, Switzerland's UBS and Dutch lender Rabobank have subsequently been handed much larger fines.
Neither Diamond or Thakkar would comment.
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