The trust arm of private bank Rothschild is reportedly preparing a management buyout. The move would come less than three months after the unit was sanctioned in Switzerland for its 1MDB dealings.
Management at the Swiss trust business of Rothschild & Co in Zurich is considering buying the unit out of the private banking parent, news agency «Bloomberg» reported on Tuesday, citing sources.
The move wouldn't entirely surprise, given that wealth managers have increasingly separated themselves from trust arms for governance reasons in recent years. At Rothschild, the trust arm was the source of embarrassing headlines recently when Switzerland's regulator found it negligent in dealing with 1MDB funds.
1MDB Link
The Swiss arm of Rotschild's trust, run by veteran Chris Schallenberger, employs 160 and records roughly 40 million euros ($46 million) in annual revenue, the news outlet reported. A spokesman for Rothschild didn't comment. The private bank and trust arm in Switzerland is run by CEO Laurent Gagnebin.
In June, Swiss regulator Finma said Rothschild's trust didn't do enough on an unnamed client suspected of money-laundering. The client is almost certainly alleged 1MBD kingpin Jho Low. The Malaysian businessman remains AWOL even as former Malaysian leader Najib Razak and his wife, Rosmah Mansor, have been criminally charged in the scandal.
Rothschild Booted
Early last year, Low succeeded in booting Rothschild as a trustee of some of his luxury assets including The Viceroy L'Ermitage Hotel in Beverley Hills, CA, a Bombardier private jet, and a luxury penthouse in the Time Warner Building in New York. The move was part of a strategy to challenge U.S. authorities on a massive asset grab as part of their criminal investigation
The head of Rothschild's trust globally, Stefan Liniger, stepped down several months later. The Swiss private bank and trust is part of the eponymous French-British dynasty which traces its wealthy roots back to the 18th century.
