Buyout of Pan Asia Advisors is possible in midst of stock trading scandal

Euram Bank moves to distance itself from Arun Panchariya and his company Pan Asia Advisors, after all three were named in an Indian stock market scandal last month.

Euram Bank is seeking to wrest full control of its joint venture based in Dubai after the resignation of the former president of Euram Bank Asia.
Arun Panchariya resigned in the wake of a report issued by the Indian authorities accusing him and several companies of trading irregularities.
Euram Bank, based in Vienna, is reviewing its stake and may seek to buy out Mr Panchariya's company, Pan Asia Advisors based in the UK, which owns 49 per cent of its shares, said a senior executive at the joint venture.
"We've advised the DFSA [Dubai Financial Services Authority] that Euram Bank AG would want to take over 100 per cent," said the executive, who asked not to be named. "For us, it's important and we want it to be seen that we're absolutely clear now of the Panchariyas."
Mr Panchariya and Pan Asia Advisors were barred from trading by the Securities and Exchange Board of India (Sebi) last month after the discovery of stock trading irregularities.
A number of banks and institutional investors were banned from trading and accused of having manipulated at least six Indian companies' share price through listings on the Luxembourg Stock Exchange.
Euram Bank was also blacklisted, but the bank will contest the Indian regulator's report, said Viktor Popovic, the chief executive.
"Euram Bank AG expects to resolve the Sebi situation and while the bank would certainly be better off without this kind of attention, it does not expect the incident to have a major impact on the business of either Euram Bank AG, Euram Bank Asia Ltd or our clients," he said. Mr Popovic confirmed that Euram Bank was in discussions with the DFSA over the stake, although he stopped short of saying it would buy out the remaining shares.
Euram Bank Asia, based in the Dubai International Financial Centre (DIFC), was not barred from trading.
Euram Bank Asia has a share capital of US$4 million (Dh14.6m), according to a DIFC filing. Euram Bank is examining the extent of the damage to the bank by the scandal before it assesses the price it would pay for the stake.
The DFSA declined to comment, citing policy on discussing pending applications made to the regulator. Mr Panchariya could not be reached for comment.
The latest scandal is the second to involve members of the company's management this year. Mr Panchariya's brother, Satish, resigned as a director of Euram Bank Asia in January.
His resignation came after the Securities Appellate Tribunal of Mumbai fined Satish and Arun Panchariya last year for "making misleading announcements which were price sensitive in nature" to the financial media in 2003.
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