Standard Chartered Plc is on the verge of finalizing amanagement buyout proposal for its principal finance division, which would becontrolled by an internal team led by unit head Joseph Stevens, The Wall Street Journal reported Sept.27, citing "people familiar with the proposal."
StanChart was already consideringa spin-out ofStandard Chartered Private Equity, which is housed within the principal financeunit, to SCPE managers amid stricter capital regulations and losses from thebusiness. Selling the entire principal finance business would mark the lender'sexit from the private equity market.
As proposed, Stevens and his teamwould launch a private investment firm to manage the lender's $5 billion instakes and would raise fresh funds for new investments. StanChart would disposeof the stakes it holds in about 85 companies over time, according to "oneof the people familiar with the proposal."
A potential divestiture of theprincipal finance arm follows a probe by the U.S. Department of Justice over allegationsof possible bribery and misconduct at an Indonesian power plant builder thelender controls.