Union Capital Limited (Union), the Australian group which has moved away from its resources background and reinvented itself as an investment bank, has teamed up with a Malaysian businessman, Faidzan Hassan, to set up the First International Bank (Maldives) on Male, the Republic of Maldives' main island off India's south-west coast. Attracted by the tiny Islamic nation's status as an offshore tax haven, Union has signed a new agreement which will increase its interest in the new offshore bank to an effective 40 per cent interest. FIBM will commence trading on September 1.
Under the agreement Union will acquire 50 per cent of the issued share capital of Bahamas-registered Alwyn Ltd in exchange for $US 40,000 worth of ordinary fully paid shares in Union. Alwyn Limited holds 80 per cent of the ordinary shares in the FIBM and the remaining 20 per cent is held by a Maldivian national, Omar Maniku. Whilst there is still some conditions precedent to be completed, settlement is expected to occur August 31. Originally, Union had planned to take only a 30 per cent stake in FIBM, which has held a banking licence from the Maldives Monetary Authority since January 1998 but has not yet traded, by buying 50 per cent of the St Vincent-registered Lavan International for US$500,000. Lavan, in turn, had agreed to buy 75 per cent of Alwyn.
FIBM will offer a range of services, from securities dealing to credit cards and corporate advice on real estate and security, but its focus will be on discreet private banking, offering clients the tax advantages of the Maldives. The Republic of Maldives, situated between the Middle East and Asia, has no exchange controls and, whilst not amongst the more established offshore financial centres, is nonetheless a tax efficient offshore jurisdiction. FIBM says that its policy is to provide total confidentiality in business transactions at all times.
Speaking of Union's foray into the offshore banking arena, Rob Murdoch, its managing director, said that FIBM aimed to be a deposit-taker from investors and would run investment funds. He said a general manager with offshore banking experience from Hong Kong had been hired. He also added that while FIBM aimed to offer a tax-efficient investment opportunity, it would take steps to ensure it was not laundering money from drugs or gun running.
FIBM is expected to take over one of Union's other offshore diversifications, where it planned to run two investment funds in the Malaysian offshore financial centre of Labuan. The funds were to be the Islamic Telecommunications and Mineral Resources Venture Capital Fund, and Iranian Venture Capital Development Fund. They are now more likely to be run from the Maldives.
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