South African- and New York-listed technology group Net1 UEPS Technologies has acquired a 30% stake in Bank Frick & Co, a family-run bank based in Liechtenstein in Central Europe. Bank Frick, which is chaired by the former prime minister of Liechtenstein, made headlines in 2014 when its CEO, Juergen Frick, was murdered.
Following completion of the transaction — which is still subject to approval by the Liechtenstein Financial Market Authority — Net1 will have up to two years to acquire a further 35% stake in Bank Frick, potentially taking its stake to 65%.
Net1, whose subsidiary Cash Paymaster Services runs South Africa’s social grants payments system, said it entered into a long-term co-operation agreement with the company in 2016 to become its banking partner for the provision of the support and banking services required to deploy Net1’s products and services, including VCPay, Finetrading and money remittances in Europe.
Bank Frick was established in 1998 by Liechtenstein trustee Kuno Frick Sr, together with other investors. The bank has been wholly owned by the Frick family since 2013 and employs about 70 people. The bank’s chairman, Mario Frick, was Liechtenstein’s prime minister between 1993 and 2001.
“We have received invaluable support from Bank Frick and we have jointly identified many exciting opportunities that would require funding, whether for our working capital finance, card issuing and acquiring, or transaction processing activities,” Net1 CEO Serge Belamant said in a statement to shareholders on Tuesday.
“We decided to become a strategic investor in Bank Frick to cement a critical component of Net1’s international activities as we are completely reliant on having a stable, long-term and strategic relationship with a fully licensed bank — being a significant stakeholder is the best way to ensure alignment and longevity.”
In terms of the agreement, US$30m of its free equity will be used as seed capital for a fund dedicated to “our future activities”, Belamant said.
“Net1 possesses enormous digital know-how. With the expansion of Net1’s involvement, we will be able to strengthen our current business areas, drive forward our fintech strategy, develop new digital business models and enter new markets,” said Mario Frick in the statement.
“Thanks to the scale effects this will bring, we can face the increasingly complex regulatory environment more effectively.”
The value of the transaction has not been disclosed.
CEO murdered
The bank made international headlines in 2014 when its then-CEO, Juergen Frick, was shot dead in its basement in the underground parking garage of its headquarters in the Liechtenstein town of Balzers. His alleged killer, Juergen Hermann, later reportedly committed suicide in his car in the town of Ruggell along the Rhine River.
Reports at the time said Hermann was a fund manager who had been involved in a dispute with the government of Liechtenstein and Bank Frick over several years.
According to a Bloomberg report published at the time, Frick’s murder was the first homicide in Liechtenstein since 2011, when three people were murdered in criminal activity.
The news wire quoted a website, registered by Hermann, saying that the government of Liechtenstein and the country’s Financial Market Authority “illegally destroyed my investment company Hermann Finance and its funds, depriving me of my livelihood”.
According to the now-defunct website, Hermann had filed lawsuits seeking recovery of 200m Swiss francs (US$200m at the time of writing) from the government and 33m francs ($33m) from Bank Frick. The lender “illegally enriched itself”, among other alleged crimes, it said, according to the Bloomberg report.
Hermann had been “publicly hostile” to the Financial Market Authority and some of its employees, forcing it to take security measures in consultation with the police, the news wire quoted authority spokesman Beat Krieger as saying. — © 2017 NewsCentral Media