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Bob Diamond’s Atlas Mara has been accused of failing to pay what it owed to acquire a Zambian bank in a lawsuit against the former Barclays chief executive’s lender that opened on Wednesday in London’s High Court.
Atlas was sued by businessman Rajan Mahtani, the founder of Finance Bank Zambia, who alleges that the pan-Africa banking group co-founded by Diamond breached the terms of a deal to purchase it in 2015.
Barrister George Spalton KC, acting for Mahtani, said that FBZ had been offered $215mn but “in fact ended up receiving less than a quarter of that sum”. Mahtani is being advised on the case by Omnia Strategy, the law firm established by Cherie Blair.
The consideration for FBZ, which had total assets of $310mn and operated dozens of branches by 2015, was partly deferred, said Spalton.
Only about $60mn was paid upfront in cash and the remainder was contingent upon various conditions, including the successful raising of funds following the acquisition.
Spalton said in written arguments that while foreign exchange fluctuations partly explained the lower-than-anticipated consideration, Diamond’s group also made “it as hard as possible” for FBZ “to meet thresholds at which they would be paid”.
Atlas Mara had sought to “prevent, obstruct, and delay” the raising of funds, for instance, and had been “eager from the outset” to prevent the seller from receiving the consideration in full, said Spalton.
Barrister Anna Boase KC, leading the defence for Atlas Mara, alleged in written defence arguments that Mahtani’s “pattern of behaviour” showed he made “unreasonable demands, threats, and continual attempts to reopen and renegotiate the terms of deals which he has done”.
Mahtani had sought to present various parts of the sale agreement as having “somehow been guaranteed to him, rather than as sums which were explicitly dependent on the fulfilment of conditions”, she argued.
Boase said Atlas Mara denied the claims in their entirety apart from “certain admissions relating to a modest number of shares held in escrow, and much of this claim has recently been abandoned”.
Diamond, one of the best known figures on Wall Street and the City of London, launched Atlas Mara in 2013 after his departure from Barclays. The 72-year-old planned to create an African banking heavyweight and established operations in several sub-Saharan countries through various acquisitions.
But the group has been reviewing its future and undertaken divestitures, with its listing on the London Stock Exchange cancelled in 2021.
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