Black investors buy Deutsche stake in South Africa
Monday, February 7, 2005 at 05:58AM
TheSpook
Deutsche Bank has become the first
foreign financial institution in South Africa to sell a stake to black
investors. The bank yesterday announced it was selling 15 per cent of
its equities and corporate-finance subsidiaries to a black investor
group, Uthajiri Financial Services, and a further 10 per cent to black
staff. The two businesses account for most of Deutsche Bank's South
African business. The German bank will provide the bulk of the
financing for the deal, the price of which was not disclosed. The sale
illustrates the lengths to which foreign companies are going to comply
with legislation on Black Economic Empowerment (BEE), South Africa's
drive to shift control of its economy toward formerly disadvantaged
racial groups. The deal, approved by Deutsche Bank's board last year,
marks the first time it has sold a stake in one of its foreign
operations. Prior to the enactment last year of the BEE charter
governing the banking industry, foreign banks worried that the document
would force them to sell stakes in their South African branches to
black investors. South African banks have been scrambling to find black
equity investors, but the charter's final version exempted foreign bank
branches from the black-ownership rules. [more]
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