The Ansbacher scandal is causing a headache for two organisations in South Africa - FirstRand, owner of Ansbacher, and Investec, owner of Guinness Mahon London. Colm Keena reports.

The continuing Ansbacher controversy has been watched closely by the South African media, its stock exchange and a number of senior executives in the South African financial sector.

References by media commentators to the Irish scandal and the possibility of a significant liability arising added to FirstRand group's woes last year when confidence in the financial sector was low and its share price was hit by scandals such as the Enron debacle.

FirstRand, owner of the Henry Ansbacher group, which in turn owns Ansbacher Cayman, has been concerned about two aspects of the Irish scandal:

Any possible tax liability that might arise for the Cayman bank;

The damage that is being done to the Ansbacher brand.

An article in the Financial Mail (South Africa) last year said FirstRand was conducting a review of its international brands and that a major issue was the damage that had been done to the Ansbacher brand as a result of the scandal in Ireland.

Interest in the matter in South Africa is all the greater because Guinness Mahon London, the former owner of Guinness & Mahon, Dublin, is now owned by another South African company, Investec.

Irish Life & Permanent, the current owner of Guinness & Mahon Dublin, is suing Guinness Mahon London for, in effect, selling it a pup.

It is no doubt sorry it ever had anything to do with the merchant bank formerly run by the late Mr Des Traynor.

FirstRand has been annoyed at the way the term "the Ansbacher deposits" has emerged when, for most of the period concerned, Ansbacher had nothing to do with Mr Traynor's Dublin/Cayman Islands operation.

The Ansbacher group bought Guinness Mahon Cayman Trust in the late 1980s but Mr Traynor's operation had been in operation since the early 1970s.

An obvious problem for the Revenue is that, even if it were to secure a judgment from the High Court that Ansbacher owed tax, it would not be able to force Ansbacher Cayman or its South African parent to pay up. There are no assets here that could be seized, according to sources.

The FirstRand website says the FirstRand group is "mainly South-African based.

"On the African continent, banking subsidiaries exist in Botswana, Namibia, and Swaziland. Internationally, banking activities exist in London, Dublin and Sydney. International asset management activities are conducted in London and Guernsey."

The Dublin reference is understood to be a reference to the Irish Financial Services Centre, though it seems there is nothing there that could be seized by the Revenue.

FirstRand group chief executive Mr Lauri Dippenaar has pointed out that the Irish Revenue has no jurisdiction over Ansbacher Cayman, though this was not something he wanted to "flaunt".

"We are good corporate citizens... but we are not going to spend shareholder money if we don't feel we have to pay," he said.

The battle between the Revenue and FirstRand/Ansbacher is likely to be an interesting one, and one in which public relations could play as key a role as the law.