Manuel clears hurdle for Old Mutual nod
SOUTH African and UK regulators are comfortable with Old Mutual’s approach to perceived or actual conflicts that might arise from the appointment of Trevor Manuel to the board of Old Mutual Group Holdings.
A spokesman at the UK-based headquarters of the Old Mutual Group, which controls the South African and international operations, said the board had considered the fact that Manuel’s spouse, Maria Ramos, is CEO of Barclays Africa Group, saying: “We have satisfied ourselves that there is no conflict and we have the utmost confidence in the integrity and professionalism of the individuals involved.”
William Baldwin-Charles, spokesman for Old Mutual Group, said the board “has engaged appropriately with our regulators in South Africa and the UK” on the issue.
Old Mutual Group Holdings is the South African-based unlisted holding company of Old Mutual Emerging Markets (which houses Old Mutual SA and insurer Mutual & Federal) and Nedbank. Old Mutual Emerging Markets and Nedbank have been designated as “domestic systemically important financial institutions” by the Reserve Bank, which means they present similar risks to the South African market that the “too big to fail” international banks did during the 2008 global financial crisis.
Manuel will join the Old Mutual Group Holdings board in January and will assume the chairmanship in March when Paul Hanratty retires.
His appointment to the board comes ahead of the expected passing into law of the Financial Sector Regulation Bill, which will create the Twin Peaks system of regulation. Twin Peaks has been described as among the most important financial regulatory reforms since the Union of South Africa left the Gold Standard in 1932.
The system has been under discussion for several years and subjected to various revisions since Pravin Gordhan, finance minister at the time, initially proposed it.
When it comes into force, regulation of the financial sector will rest with two entities, the Reserve Bank and the Financial Services Board. The bank will be responsible for ensuring adherence to prudential regulations such as solvency and liquidity of financial institutions as well as for the stability of the financial system. The FSB will be customer-centric. It will be responsible for how financial companies conduct their business, including the pricing of their products and treatment of customers.
Although a few commentators have raised concerns about a perceived conflict, most have welcomed Manuel’s appointment. As South Africa’s longestserving finance minister, Manuel brings unparalleled experience and expertise.
Baldwin-Charles confirmed that Old Mutual was anticipating Twin Peaks. Under it, Old Mutual expects to be asked to look at the potential risks on a combined basis of its two domestic systemically important financial institutions. “Old Mutual Group Holdings will be mandated with that role and we believe Manuel is the ideally qualified person to chair [it].”
We have satisfied ourselves that there is no conflict