(Bloomberg) -- Banque Havilland SA, a private bank owned by the family of close friends of the disgraced British royal Prince Andrew, is beginning to wind down after the European Central Bank told the firm it would revoke one if its key licenses.
Banque Havilland is no longer accepting new money and executives have entered exclusive negotiations with a rival to acquire its business in Monaco, according to people familiar with the matter.
The moves come after the lender was informed in a letter from the ECB that it would no longer be allowed to conduct business in its home country of Luxembourg, the people familiar with the matter said, asking not to be named discussing non-public information.
A representative for the ECB declined to comment, while a spokesperson for Banque Havilland did not respond to multiple requests for comment. Finews reported the ECB decision to revoke the license earlier this week.
Being stripped of its license marks a dramatic reversal of fortunes for Banque Havilland, which is controlled by the family of UK Conservative Party donor David Rowland and could once call upon Prince Andrew to act as an unofficial door-opener to the world’s financial elite. For years, the British royal provided the Rowlands and the bank with introductions to governments, billionaires and top business people, Bloomberg has previously reported.
Andrew was himself a client of Banque Havilland and received a £1.5 million ($1.9 million) loan from the bank in late 2017 only for David Rowland to wire a similar amount of money days later to an account held by the prince at the bank to repay the debt, Bloomberg has reported. The loan was made to Andrew despite a warning from the bank’s staff that the transaction was “not in line with the risk appetite of the bank.”
David Rowland and a spokesperson for Prince Andrew were not immediately available for comment.
Regulatory Woes
Banque Havilland has had repeated run-ins with regulators and lawmakers in recent years.
The ECB’s latest decision was prompted by the bank’s failure to implement changes required of it after it was fined €4 million for anti-money-laundering failings by its local Luxembourg regulator in 2018, according to the people familiar with the matter. At the time, the bank had vowed it would redefine its approach to risk and end relationships with some clients.
Then just last year, the Financial Conduct Authority banned Edmund Rowland, who is David Rowland’s son and was chief executive officer of Banque Havilland’s now-shuttered London branch, along with two other bank employees after it found they gave improper advice and pushed “manipulative trading strategies” in Qatar.
The UK watchdog said Banque Havilland pushed a presentation aimed at devaluing the Qatari riyal to the country’s rivals after a Saudi Arabia-led coalition severed diplomatic ties. A copy of the presentation was handed a copy to an official of an Abu Dhabi sovereign wealth fund.
All three executives are challenging the FCA’s findings.
Separately, the head of Banque Havilland’s Monaco division is on trial in Monaco along with five other past and present bankers as part of a case that prosecutors hope will shed light on lenders’ lax controls in the tax haven.
Different Entities
The ECB’s work is happening in conjunction with the Commission de Surveillance du Secteur Financier, which supervises the Luxembourg financial sector, the people familiar with the matter said.
Banque Havilland has a separate, licensed subsidiary in Liechtenstein, which also operates a branch in Switzerland. Those subsidiaries — as well as the business in Monaco — are subject to supervision by authorities in France, Switzerland and Liechtenstein.
The Liechtenstein and Swiss entities have been completely separated from the company’s Luxembourg operations on an operational basis, according to one of the people familiar with the matter. The company is in the process of hiring advisers to handle those businesses going forward, the person said.
Representatives for the authorities in Luxembourg, France, Switzerland and Liechtenstein declined to comment.
--With assistance from Gaspard Sebag and Bastian Benrath-Wright.
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