Mergers and acquisitions between some of the world’s largest corporations within the FX industry played a substantial part in last year’s series of commercial events, however as 2014 heads toward the end of its first month, a retail firm in Cyprus has followed in those footsteps.
Upon investigating the reason behind CySec having today issued a notice that FXGM had renounced its license, Forex Magnates spoke to FXGM CEO, Gil Farhang who explained that, “The business activities and brand name of FXGM has been purchased by Depaho Ltd, which is a company based in Cyprus that is regulated in its own right.”
“Depaho as the brand owner of FXGM will continue to promote and support the brand FXGM,” continued Mr. Farhang.
The extent of the purchase by Depaho Ltd covers every key employee as well as contractors in circumstances by which such staff have been assigned, including Mr. Farhang himself, whose employment has also been transferred to Depaho Ltd’s payroll.
Depaho Ltd has attracted various strategic partnerships with fellow companies recently under the same umbrella. A notable example of this being its ownership of GTCM, which is a brand of Depaho Ltd, as well as being a white label of bforex, with FXGM itself being a subsidiary of bforex.
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During the first quarter of last year, Cyprus underwent a banking crisis which resulted in two of its major national banks becoming insolvent, and closing for a number of days before a revolutionary ‘bail-in’ was imposed on account holders of the two institutions concerned, namely Laiki Bank and the Bank of Cyprus.
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This generated an industry-wide dialog as to the potential survival of the retail FX industry in Cyprus, however a year on, the vast majority have not only survived but indeed prospered, despite firms doing business with Cyprus entities taking a very conservative view post-crisis.
In the case of FXGM, shortly after the banking crisis, the company released several members of staff from the sales desk which covers the English-speaking market, citing a move toward concentration on other regions rather than any connection with the island’s economic situation as the driving factor behind the decision.
Although the transaction details of this particular integration with Depaho Ltd have not been disclosed by FXGM, the preceding events are likely have been considered pre-merger.
Mr. Farhang expects to become CEO of Depaho Ltd, and explained to Forex Magnates that, “My nomination was approved by the board of directors and CySec has been notified of this. I am expecting the process to be finalized soon,” he concluded.
Indeed, with the two companies having joined forces, it is clear that both entities’ view not only corporate synergy, but share optimism about the future of Cyprus’ FX industry at a time when many newly-licensed companies in the region renounced their licenses in order to opt for Britain’s FCA oversight instead.
When asked whether the company has any significant plans to eschew western markets altogether and concentrate on the much-coveted Asia-Pacific region, Mr. Farhang declined to detail the company’s perspective on this matter.