Spanish banking giant’s fate in the hands of an Indian

Spanish banking giant’s fate in the hands of an Indian
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First Published: Wed, Mar 28 2007. 10 59 PM IST
Updated: Wed, Mar 28 2007. 10 59 PM IST
New Delhi: What began as small investments in stocks about 10 years ago has pushed once small-time investor Ramchand Bhavnani to an enviable position today, where he can decide the fate of Spain’s fifth-largest bank, Bankinter.
Continuing with the purchase of shares in Bankinter over the years, India-born Bhavnani—an unknown name till a few years ago—has raised his holding to more than 14%.
Bhavnani’s rise, which also earned him a director’s seat on Bankinter’s board in 2005, holds even more significance as Spain is a country where large businesses are mostly owned by powerful families and an intricate network of cross-holdings.
The Spanish lending giant said in a regulatory filing that Bhavnani, the second-largest shareholder, now owns 14.08% stake in the company, worth about $900 million.
The 63-year-old Sindhi businessman, who had moved to Hong Kong from Mumbai long back before moving to the Spanish territory of Canary Islands, has been consistently raising his stake in Bankinter—from about 6% in 2003 to 12% in October 2006 and to 13.6% till last week.
His growing stake has stirred speculations that the Spanish bank could soon become an acquisition target and Bhavnani could reap huge gains from the sale of his stake in Bankinter, currently controlled by the Boltin banking dynasty.
However, Bhavnani is unlikely to favour a potential sale to some Indian entity. He had said in an interview last month that he would prefer a possible sale to a Spanish firm and not a foreign bank.
Bhavnani’s rise to the driving seat at Bankinter bears resemblance to many super-hit film plots and has been even featured by publications such as The Wall Street Journal. After graduating from Mumbai, he worked for a Sindhi expatriate in Hong Kong and later married his boss’ daughter.
Later, he was sent by his father-in-law to rescue a faltering business—Casa Kishoo—in Canary Islands at the age of just 21, an assignment he completed successfully.
Subsequently, he started building relations with local banks in Canary Islands and took loans to import goods. He also started investing in the Spanish stock market in 1986.
Bhavnani was an active buyer during the 1987 stock market crash and is believed to have started reaping huge gains by 2003, after sustaining huge losses during the market crash of 2000-01.
His windfalls include acquisition of a 10% stake in Banco Zaragozano SA, which he later sold for $137 million, netting a profit of $65 million.
Bhavnani’s family is believed to have a number of investment portfolios managed by professional asset managers. The family also owns a chain of hotels in Canary Islands and Bhavnani’s total wealth is estimated to be in double-digit billion dollars.
Depite all his riches, Bhavnani continues to work from a desk at Casa Kishoo, where counters are full with cheap clothing and electronic goods imported from China.
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First Published: Wed, Mar 28 2007. 10 59 PM IST
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