Bob Diamond, ousted as boss of Barclays last year after the Libor-rigging scandal, potentially stands to reap millions of pounds from a new stock market venture set up to acquire financial services companies in Africa.
The US banker, often criticised for the level of his pay during his 15 years at Barclays, has become a nonexecutive director of a cash shell that has raised £200m from a stock market listing in London, although registered in the British Virgin Islands. Along with his co-founder, Ashish Thakkar – a British national now based in Dubai – Diamond has special "founder-preferred shares" in the new vehicle, known as Atlas Mara Co-Nvest, which give the pair payouts if the share price rises above a certain level.
Atlas Mara Co-Nvest is based on Diamond's New York firm Atlas Merchant Capital and Thakkar's Mara range of businesses in 19 African countries. The two companies have invested $20m in the cash shell. Thakkar, often described as Africa's youngest billionaire, started his first IT companies in 1995 at the age of 15 in Uganda and is one of the World Economic Forum's young global leaders.
In a stock market announcement, Atlas Mara Co-Nvest said that although it was not involved in any discussions with target companies it could make acquisitions anywhere in the world, and was likely to pick Africa. To counter concerns that shell companies often tie up investors' cash without making deals, the business will be wound up in 12 months if no deals have been concluded by then.
Arnold Ekpe, a former boss of Africa's Ecobank, has been appointed chairman of the company, on an annual fee of $125,000. The company has also named a number of non-executive directors, including Rachel Robbins, a former vice-president of the International Finance Corporation, who will get $85,000 a year. Ekpe is also receiving 50,000 five-year options over the shares, which listed at $10, and the non-executive directors are getting 37,500. Neither Diamond nor Thakkar is receiving any options or fees.
The prospectus shows a higher fee, of $500,000, will go to Jyrki Koskelo, a former executive of the World Bank who will advise on potential acquisitions. The founder-preferred shares give a payout if the shares rise above $11.50 for 10 consecutive days after an acquisition. The payout is based on 20% of the difference between $11.50 and the share price.
The 133-page prospectus said that while Barclays could face litigation over Libor fixing, Atlas Mara Co-Nvest does not believe it will have "an adverse impact on the company or its ability to make the acquisition (or subsequent acquisitions) or on MrDiamond's ability to perform his role for the company".
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