Flowers' European head departs

JC Flowers is parting company with its European head, Ravi Sinha.

He becomes the second high profile director to leave the firm this year following German head, Renate Krümmer.

News of Sinha’s leaving was announced today in a statement that said the firm was “strengthening” its presence in both Europe and Asia via two senior appointments. 

Ravi Sinha

The first key personnel move is David Morgan, formerly JC Flowers’ chairman in Australia, who now assumes responsibility for the firm’s activity in both Europe and Asia Pacific from Flower’s London office. Prior to joining Flowers in 2008, Morgan had spent nine years as chief executive officer of Westpac Banking Corporation, one of Australia's largest financial services companies.

The second appointment is that of Sir Callum McCarthy, the former chairman of UK regulatory body the Financial Services Authority (FSA). He will also be based in the London office in the newly created position of European chairman. Prior to joining the FSA, McCarthy led Ofgem, the UK’s economic regulator for the gas and electricity industries.

The statement said no more about the departure of Sinha, except that he is managing director and “will leave JFC”. The firm was unavailable to comment further on the departure.

As part of his responsibilities in Europe, Sinha led the management of a €1 billion investment in troubled German real estate lender Hypo Real Estate, which has since been nationalised.

Callum McCarthy

The 2008 investment – giving Flowers and two others members of its consortium almost 25 percent of the Munch-based firm – encountered significant problems amid the onset of the credit crunch.

Hypo struggled to service a huge debt pile taken on by the acquisition of Dublin-based public services and infrastructure lender Depfa and had to be bailed out by the German government and German financial institutions. The subsequent squeezing out of minority shareholders, including JC Flowers, by German bailout fund SoFFin has led to reports that the US firm is considering legal action.

The firm’s other European deals include an investment in a 25.6 percent stake in German Landesbank HSH Nordbank, for which it paid €1.25 billion in 2006. HSH also received German state support in the form of €30 billion in guarantees from German government's bank rescue fund SoFFin, although it is now in a position to scale back its state funding, according to a report on newswire Reuters.

In the UK, JC Flowers was one of the backers behind the creation of The Pension Corporation in 2006. Run by former Duke Street founder Edmund Truell, the Pension Corporation buys up sponsorship of UK pension schemes.

The firm was also one of the unsuccessful suitors for troubled UK mortgage lender Northern Rock in 2007. Northern Rock was subsequently nationalised rather than sold to private investors.

JC Flowers’ chairman and founder Christopher Flowers praised Morgan’s “disciplined and strategic” approach to deal making and McCarthy’s “extensive banking and regulatory experience” in a statement.