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BBY chief resigns; firm in capital raising talks with George Wang
05.11.2015 Australian Financial Review
When equities or commodities are plunging, government bonds tend to do very well. Reuters 

BBY chief executive Arun Maharaj has resigned from the stockbroking and advisory firm after 13 years with the company, as BBY embarks on a capital raising effort including approaching George Wang, an influential business man, and chairman and chief of AIMS Financial Group.

BBY executive chairman Glenn Rosewall confirmed on Wednesday that Mr Maharaj would part ways with BBY in about two weeks, as revealed on Mr Rosewall will assume the role of chief executive.

"After 13 years I'm leaving BBY to spend time with my family. I look forward to coming back, doing bigger and better things," Mr Maharaj said.

His time at BBY also included stints as chief financial officer and head of asset management. Mr Maharaj began his transactional career with PricewaterhouseCoopers, and has also worked in senior management positions within strategy at BT Financial Group.

A changing of the guard comes as BBY is in the process of raising capital. The firm is thought to be in negotiations with parties including staff members and George Wang, chairman and chief of AIMS Financial Group on the matter. Since 1999, AIMS has raised approximately $4 billion in funds from the capital markets. Mr Wang is also deputy chairman of the Asia Pacific Stock Exchange and is president of the Australia-China Finance & Investment Council. 

"We have had communication [with BBY]," Mr Wang said on Wednesday. "We have not gotten deeply involved yet." 

BBY is navigating a difficult period and in February, detailed that it was in the midst of a sweeping operational review, following a margin call blunder last year that almost brought the company to its knees.

The review follows a damning Australian Securities Exchange circular earlier this year that slapped BBY with a $180,000 fine for contravening operating rules. The exchange also ordered BBY to improve its risk management and processes.

The matter, which the ASX stipulated may have caused a default or insolvency event, related to a margin call on a $192 million transaction in Aquila Resources in 2014. BBY is also understood to be on the Australian Securities and Investments Commission's radar following the incident. "ASIC is always very focussed on the goings-on of all market participants," a spokesman said.

As part of the review, BBY advisers were this week informed of a new $15 per trade fee that can be absorbed by the adviser or passed onto the customer. Last year, some of BBY's institutional advisers moved to a commission only pay structure. 

BBY has already said it will start charging retail broking customers $350 a year in a bid to spur inactive account holders into action and shore up profitability. It's understood those clients who are providing BBY with regular brokerage are unlikely to cop the fee. 

Account holders will receive access to the new BBY Plus service, which provides capabilities including research and finance news.  

BBY has flagged a $500,000 after tax profit for the six months ended December 31, inclusive of the impact of the ASX fine. In October, BBY reported its second consecutive fiscal year of statutory losses.