SRA delays force Parabis to defer Duke Street investment

Insurance firm Parabis has been forced to delay its ABS deal with private equity house Duke Street because the SRA is struggling to cope with the flow of post Legal Services Act applications.

Tim Oliver
Tim Oliver

It is understood that the Parabis deal was expected to complete this week, but delays in the application process has caused the parties to revert to a contingency plan.

Frustration is mounting at the apparent delays being caused by due diligence issues for firms proposing to be acquired by listed companies.

Parabis agreed a £50m funding deal with private equity house Duke Street in January with the aim of going live at the end of February. That could now be delayed until the end of April.

“It’s been immensely frustrating,” said Parabis chief executive Tim Oliver, the driving force behind the deal. “We understand that the right firms need to be authorised but they [Duke Street] are already FSA regulated. We struggle to understand why they have made such a meal of it.”

It is understood that there are concerns that the six-month timetable established by the watchdog is not being adhered to.

A source commented: “There’s widespread dismay at the SRA’s incompetence. The timetable has slipped again and again.”

Another added: “The issue is that we don’t have a proper timetable. There’s a six-month statutory timescale, but it only starts when they decide. Some people think it starts when you put the application, but that isn’t the case.”

It is understood that Silverbeck Rymer, which agreed a deal with AIM-listed Quindell Portfolio in January, is also facing regulatory hurdles that are causing delays to the deal going live.

According to another source the Legal Services Board (LSB), the SRA’s overarching regulator, has stepped up its interest in the applications.

“Issues have been raised with the LSB,” the source says. “They’re more closely involved than they were and are now in regular dialogue with the SRA. At the end of the day, the LSB has a partial responsibility and needs to get more involved.”

Russell Jones & Walker, which is awaiting approval for its deal with Australia Stock Exchange-listed Slater & Gordon, expects the deal to complete by 30 March.

An insider said: “The deals with Parabis and Silverbeck Rymer is a step into the unknown for the SRA. Slater & Gordon has five years’ of experience working in this environment and the SRA seems quite comfortable with that. At this stage we are 90- 95 per cent sure that it will go live on 30 March.”

A spokesperson for the SRA defended the organisation’s processes, saying it would not compomise on its duty of care (19 March 2012).