Safra's murder casts shadow over HSBC deal

Rupert Wright reports on the mysterious death of the century's most secretive banker

The sudden and brutal death of 67-year-old financier Edmond Safra on Friday morning - burnt to death in his flat in Monaco - signals the end of one of the century's most successful financial stories. It also calls into question the recent acquisition by HSBC of Safra's two main banks, Republic National Bank of New York and Safra Republic.

In November Safra shocked the financial community by agreeing a personal reduction of $450m (pounds 281.2m) from his share in the sale. Even so, he was set to pick up nearly $3bn from the deal.

The sale had been put in doubt by potential liabilities stemming from an investigation by the Japanese Financial Services authorities into the operations of a subsidiary of one of Safra's banks. As well as agreeing a personal price reduction of $450m, Safra agreed to guarantee the first $180m of any losses to keep the deal alive.

HSBC is expected to press ahead with the purchase, due to be completed by the end of this month, even with the loss of the banks' charismatic leader. "HSBC will uphold the banking tradition and integrity which were the hallmark of Edmond's life," said Sir John Bond, the group chairman of HSBC. However, he would not comment further on the deal. "We extend our sympathies to Mrs Safra."

Edmond Safra was introduced to banking at an early age. His father used to take him on his daily tour of the bazaar in Aleppo, Syria, where he was a money lender. Edmond's job - aged just five - was to slip into the stockrooms of his father's clients. While pretending to be playing, he had to check whether the stock had dust on it, or whether it was selling as quickly as the trader was assuring his father in the next room. When they left, his father would ask him a simple question: "Should I trust that man?"

Safra's own banking career began in Brazil in the 1950s, built mainly on the basis of trust. He persuaded rich immigrants to the country, largely Jewish, that he would look after their money. His mantra was that while he would not make them a lot of money, he would not lose it. He invested 95 per cent of these assets in AAA-rated bonds, speculating with the last 5 per cent. This approach made him enormously rich.

He expanded into the US, setting up the Trade Development Bank, which he later sold to American Express. Although the subject of a bitter wrangle with Amex, he went on to set up Republic National Bank of New York and Safra Bank.

"He was the ultimate in secret banking," says an insider. "In some ways he was a prehistoric creature. He would sit in his house in the South of France, the former home of King Leopold of Belgium, at a desk that used to belong to Napoleon, asking disarmingly simple questions such as 'Is Yeltsin a good man?' "

Safra's seemingly Forrest Gump-like approach was highly successful. It was also visionary. He spurned commercial lending, focusing on asset management many years before his competitors raced to copy him.

He ran the banks with a minimal management structure, working with a small cabal of advisers. He spent most of the day on the telephone, to the extent that there was even a telephone in his shower.

Safra's personal tragedy was that he failed to produce the heir that he so desired. When his brothers, Joseph and Moise, were either unwilling or unsuitable to take over his American holdings, he cut a deal with HSBC. Safra had suffered from Parkinson's disease for a number of years, and wanted to sort out his affairs before the disease affected him too much.

The motives behind his murder are unlikely ever to be fully revealed. Financiers expressed surprise that such an outrage should happen in Monaco - one of the most highly policed states in the world. "It could have been just a couple of hoods," says one international banker. "But it is more likely to be an inside job, from someone unhappy with the resolution of the sale of Safra's share in his banks."

There is a certain irony in the fact that the century's most secretive banker will probably take the motives for his death with him to the grave.

MAIN SECTION, PAGE 22

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
tv
News
Prince Harry is clearing enjoying the Commonwealth Games judging by this photo
people(a real one this time)
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Your picture is everything in the shallow world of online dating
i100
Life and Style
Attractive women on the Internet: not a myth
techOkCupid boasts about Facebook-style experiments on users
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
football
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

HR Business Partner (Maternity Cover 12 Months)

£30000 - £34000 Per Annum 25 days holiday, Private healthcare: Clearwater Peop...

Business Analyst - London - Banking - £400-£450

£400 - £450 per day: Orgtel: Business Analyst - Credit Risk - Banking - London...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on