Sightings from The Catbird Seat
~ o ~
September 2, 2005
BinLaden shareholder in European
parking management company
YOUR MONEY GOES BACK TO THE RICH, LADIDA.
Every time you put money in the meter, it says KECHANG! in Manama, the capital of
Bahrain and a few moments later your money goes into an account on the Cayman
Indeed, the sheiks of Bahrain, Kuwait and Saudi-Arabia have recently taken over
Europe’s leading car park management company, Apcoa Parking Ag. At more than
700,000 parking spots in Europe you now buy tickets from them....
Little by little Apcoa Parking AG acquired the individual parking management
companies in Europe and turned it into one big holding. Apcoa Parking AG was until
very recently a part of German quality shoemaker Salamander....
Salamander is a shell company for Germany’s number one electricity giant EnBW.
EnBW has brought together a number of companies it owns and that are not related to
energy in Salamander. HSBC splits ownership of EnBW with Electricite de France.
And so all these parking spots belong to Europe’s largest investment bank. That says
something about the profits that can be made there.
To put things right: Apcoa doesn’t own all of these parking lots. They are built, financed
by the local communities. Apcoa doesn’t take any risk. It merely manages the parking
After the attacks on the WTC in New York and the fear on the markets, EnBW sells its
non-energy holdings. Apcoa is sold to Investcorp. The company is present in
London, Manama and in the Cayman Islands.
Investcorp paid 67 million Euro in equity for Apcoa. It isn’t really buying, but more an
aggregate of holding companies marrying their resources.
Catbird Note: "The Investcorp referenced herein is in no way affiliated with Investcorp
Retirement Specialists, Inc. a financial services and planning firm specializing in 401(k)
and pension management."
Investcorp isn’t your everyday investment company. It merely works with the very rich,
preferably from the middle-east. In 2005 its portfolio is valued at 8.6 billion dollars.
If we would be really accurate we would call Investcorp a leveraged buy-out company.
It’s WALLSTREET all over. Investcorp holds different funds to which you - not you, but
they, the very rich - can subscribe. Investcorp then puts the companies it acquires into
these funds and immediately has its money back (with a profit for the real shareholders
According to Time Magazine, Investcorp is known to have worked the books in
the ninetees, making a losing company look like a profitmaker.
Nemir Kirdar is president and CEO. Forbes puts him at number 206 on the Rich List.
His excellency Abdul-Rahman Al-Ateequ, ex-minister of oil and finance of Kuwait,
advisor to the emir of Bahrain and the first ambassador of Kuwait to the U.S.A. has
been Chairman since the start of the investment company. Vice-president is, Ahmed
Ali Kanoo, who manages about 1.5 billion dollars of the family fortune. Among the
shareholders we find Sheik Ahmed Zki Yamani, ex minister of oil of Saudi-Arabia and
seven members of the House of Saud.
Also present in this group is Abdullah Taha Bakhsh, connected to different bank
frauds. Until September 11th 2001 he was representative of the Saudi Bin Laden
group in the U.S. According to the prospectus of Investcorp from 1992 the Minister of
Finance of Bahrain is indirectly one of the major shareholders through a shell-company.
BANK OF CROOKS AND CRIMINALS INTERNATIONAL
This is where it gets really interesting. Abdullah Taha Bakshs, Abdul Rahman Al-Ateeqi were both important shareholders in the Bank of Credit and Commerce
International. The BCCI went down in a sea of scandals in the early 90's. 23 billion
dollars disappeared in the hole in 73 countries and still is missing. The American
Justice Department calls BCCI a criminal organization under cover of a bank.
The C.I.A. slushed funds through BCCI to the Mujahedin. This went quite easy
because Osama Bin Laden had a few accounts at the BCCI. Illegal finance for
arms deals with Iraq and Iran were being done at BCCI. Money laundering for the
Escobar and Meddelin-cartel all went through BCCI. When the curtain fell 1
billion dollars worth of loans was booked to a random collection of Kuwaiti from
the yellow pages.
Khalid binMafhouz holds the number 2 slot at Investcorp with 25% of the shares. He
currently is number 210 on the Times rich List. He was member of the board of BCCI
and made a deal with the U.S. Justice Department. He paid 225 million dollars for
claims, 37 million dollars in lieu of fines and 253 million dollars for claims.
In 2003 it transpired that the Bank of England never stopped the British seat of BCCI
though it knew the bank laundered money from drugs trade.
Former president Manuel Noriega, former President Ferdinand Marcos, and
Saddam Hussein were among the clientele. From complaints in South-Korea it is clear
that about 120 members of staff from 33 embassies had put money at the BCCI.
Khalid bin Mafhouz, explains he has financially backed the Mujahedin in Afghanistan.
But then, so did the U.S. It may be useful to remind the reader that Osama Binladen
was one of the leaders of the Mujahedin. Bakr Mohammed bin Laden, Osama’s
brother, has a seat on the executive board.
Investcorp Holding is owned by Investcorp Bank which in turn is held by SIPCO, a
Cayman holding company. SIPCO’s 320 shareholders prefer to keep anonymity....
THE PARKING LOT!
These are the people that “manage” your parking lots. They receive money for our own
public spaces, streets and squares.
Every time we put money in one of the more than 700,000 parking meters of Apcoa-managed parking lots, money directly flows to Bahrain and the Cayman Islands.
Apcoa AG has a turnover of about 500 million euros. Everyday 700,000 meters
receive Eurocents, pounds and pennies. A continuous flow of money day in day out.
It really is like a source of oil.
~ ~ ~
For more, GO TO > > > APCOA: Vultures in the Parking Lot; How goes YOUR WAR,
Mr. Bush?; Songs of the Drug Vultures; The Strange Saga of BCCI
* * * * *
GOOGLING FOR THE GHOULS IN INVESTCORP
* * * * *
From Forbidden Truth: U.S. Taliban Secret Oil Diplomacy and the Failed Hunt for
THE BANKER OF TERROR
By Jean-Charles Brisard & Guillaume Dasqauié
Khalid bin Mahfouz is not your typical banker. He’s not flashy or audacious. At
seventy-three, he prefers to keep a low profile. A diabetic for years, he remains
impassive behind his thick glasses and moustache, as if distrustful of anything outside
his own world.
In 1950, Khalid bin Mahfouz’s father founded Saudi Arabia’s first bank, the National
Commercial Bank (NCB). As powerful as he is discreet, Khalid bin Mahfous finances
all the kingdom’s extravagances . . .
His family is one of the most influential in Saudi Arabia. Like the bin Laden family, the
bin Mahfouzes came from the province of Hadramaut in southern Yemen....
When Salim bin Mahfouz died in 1994, Khalid took control of the empire. The bin
Mahfouz empire is a vast one, covering the major sectors in Saudi Arabia and abroad,
most notably banking, agriculture, pharmaceuticals, and telecommunications. The
family’s economic activities are rooted in three main holding companies in Jeddah: the
NCB, Nimir Petroleum Limited, and the Saudi Economic and Development Company
(SEDCO). From this base, the family holds majority shares in close to seventy
companies around the world.
Khalid bin Mahfouz was a key figure in the Bank of Credit and Commerce
International, or BCCI, affair. Between 1986 and 1990, he was a top executive
there, holding the position of operational director. His family held a 20 percent share in
the bank at the time. He was charged in the United States in 1992 with tax fraud in the
In 1995, held jointly liable in the BCCI’s collapse, he agreed to a $245 million
settlement to pay the bank’s creditors, allowing them to indemnify a portion of the
bank’s clients. The specific charges against the bank were embezzlement and violation
of American, Luxembourg, and British banking laws.
After dominating the financial news throughout the 1990s, the BCCI is now at the
center of the financial network put in place by Osama bin Laden’s main
The Bank of Credit an Commerce International was founded on November 29, 1972,
by a Pakistani man, Agha Hasan Abedi, who comes from a family of Shiite Muslims.
After getting his law degree, he started a career in banking, notably with the Habib
Bank. After the partition of India, Abedi went to Karachi in Pakistan in the late 1940s.
There, he met Yusif Saigol, the heir of a wealthy family of merchants, who financed the
creation of the United Bank Ltd.
Taking advantage of the country’s economic crisis, and of the Arab dependence on
Pakistani labor, he convinced authorities in Abu Dhabi in 1966 to open a branch for
Pakistani workers in the United Arab Emirates, and to allow him to manage the workers’
In order to ensure the BCCI’s independence, Abedi decided to create two holding
companies consolidating all of the branches. BCCI Holdings SA was registerd in
Luxembourg in 1972, while BCCI SA was registered in the Caymen Islands in 1975.
At the same time, a fund for employee shareholding called International Credit and
Investment Company Holding was created in the Cayman Islands.
In order to improve the BCCI’s international standing, the founders got support from the
Bank of America. Eager to expand its presence in the Gulf States, the bank took a 25
percent stake in the BCCI, for a total of $2.5 million. The Bank of America became a
shareholder alongside Sheikh Zayed bin Sultan al-Nahayan; Kamal Adham, Saudi
Arabia’s former head of intelligence; and Faisal Al-Fulaij, president of Kuwait Airways;
as well as rulers from the different emirates that make up the United Arab Emirates.
Success came quickly for the BCCI, and the oil crisis played an important part in its
expansion. In 1988, the BCCI counted four hundred branches in seventy-three
countries. However, from the very beginning, the bank adopted some unusual
financing methods, such as allocating large loans without a real guarantee, in return
for investments in the company according to the practice of “loan back.”
This way, the main loan beneficiaries were the shareholders themselves, such as
Kamal Adhan ($400 million) and the Gokal family ($80 million)....
~ ~ ~
On July 2, 1991, regulators in the United States, Great Britain, France, and Spain –
as well as administrative authorities in Switzerland and Luxembourg – decided to
liquidate the bank, and the ruling took effect July 5.
On July 29, the New York district attorney charged the bank’s main managers with
fraud. The BCCI was fined $200 million....The U.S. Senate report on the BCCI
described Khalid bin Mahfouz as “the most powerful banker in the Middle East.”
In reality, he is much more than that. At the crossroads of business affairs and militant
Islam, he embodies all of the kingdom’s contradictions in regard to Islamic
Khalid bin Mahfouz’s problems began in 1992 with the BCCI scandal, in which he was
accused of having precipitated the collapse. At the same time, the Senate report on
the BCCI revealed documents implicating the National Commercial Bank in the
delivery of arms between Israel and Iran in the 1980s. The operation was
financed by the Saudis in the framework of an agreement to liberate American
hostages in Beirut.
In view of these accusations, Khalid bin Mahfouz was forced to step down as CEO on
the NCB in 1992. His brother Mohammed took over for him in the interim until his
return in 1996, after he agreed to a settlement to pay back BCCI creditors.
His decline continued in 1999, with the American investigations into the U.S.
embassy attacks in Africa one year earlier. American authorities discovered
suspicious transfers of “tens of millions of dollars” made after April 1999 from
the NCB to charity organizations associated with Osama bin Laden, some of
which were controlled by Khalid bin Mahfouz’s own family.
Normally hesitant to cooperate with American authorities, Saudi Arabia was faced with
a moral dilemma, as well as a major attack on its own interests, because the bank was
also “its bank.” The kingdom finally ordered an audit the same year in order to verify
The audit uncovered massive transfers made to charity organizations with ties to
Osama bin Laden, some of which were controlled by members of the bin Mahfouz
family. Shortly thereafter, Saudi authorities placed Khalid bin Mahfouz under house
arrest in a hospital in Taif. According to our information, he is still there as of mid-2002.
With Saudi interests at stake, the kingdom needed to safeguard what it could, and to
have more control in the bank’s management. Starting in July 1999, the Saudi regime
decided to dilute the bin Mahfouz holdings by purchasing a major share of their
investment and placing it in the Public Investment Fund (40 percent) and the General
Organization for Social Insurance (10 percent). At the same time, Abdullah Salim
Bahamdan, who had long served as CEO, became the bank’s new president.
Furthermore the Saudis had to handle the bin Mahfouzes carefully, since they knew the
family had close ties with Osama bin Laden. As former CIA director James Woolsey
confirmed, in addition to the financial support given by the bin Mahfouzes, there are
also family ties between them.
Khalid bin Mahfouz’s own sister is married to Osama bin Laden....
~ ~ ~
The bin Mahfouz financial and charity network is one of the most active in
facilitating Osama bin Laden’s activities.
We are now discovering the many ramifications and connections between this empire
and the Al Qaeda organization.
The two worlds have come in contact many times over the years. While it is sometimes
difficult to prove direct financial support, there is, however, enough interconnection
between economic structures and Islamic entities to suggest their collusion....
~ ~ ~
The bin Mahfouz galaxy is not only made up of dubious investments, but its creator
gives a new dimension to business relations. He was able to establish such relations in
the past, notably with the United States.
A Pakistani bank in which he is the main shareholder is a good example: Prime
Commercial Bank is run by Sami Bubarak Baarma, a Saudi Arabian citizen, born in
1955; Saced Chaudhry; and Abdul Rahman bin Khalid bin Mahfouz, son of Khalid
Sami Murarak Baarma is an executive of SNCB Securities Limited in London,
another bin Mahfouz financial subsidiary. For the NCB, he manages a financial network
called Middle East Capital Group (MECG), based in Lebanon. One MECG’s directors
is Henry Sarkissian, who runs several companies in the Binladin Group. Sami
Mubarak Baarma is also in charge of the Saudi National Commercial Bank’s
international division. As a result of his influence in Pakistan, he became a member of
the Carlyle Group’s advisory committee.
The Carlyle Group’s leading investors include many figures from former U.S.
president George H.W. Bush’s entourage, as well as that of President George W.
Bush. Its board of directors includes important figures from the Bush team:
James A. Baker III, former secretary of state under the first President Bush; Frank
C. Carlucci, former secretary of defense under Ronald Reagan; Richard G.
Darman, former director of the Office of Management and Budget under George
H.W. Bush between 1989 and 1993; and John Sununu, former White House chief
of staff under George Bush.
In addition, Saudi Prince Al-Waleed bin Talal, nephew of King Fahd, owns an
indeterminate stake in the group. Even George W. Bush was a member of the board
of directors of one of the Carlyle Group’s subsidiaries, Caterair, between 1990 and
In 1987 an obscure Saudi financier named Adbullah Taha Bakhsh invested in Harken,
a Texas oil company of which George W. Bush was a director from 1986 to 1993.
The deal consisted of recapitalizing the company, which was going through difficult
times. This Saudi investor is none other than the partner of Khalid bin Mahfouz and
Ghaith Pharaon. And so Taha Bakhsh became an 11.5 percent shareholder in
Harken Energy Corp.
His representatives within Harken Energy is not unknown either. Talat Othman, is a
member alongside Frank Carlucci of one of America’s most prestigious “think tanks,”
the Middle East Policy Council as well as being a leading Arab-American supporter
of the Republican party.
These investors know each other well. They’ve been sitting on the same boards for
more than ten years, alongside Salem bin Laden, the brother of Osama bin Laden
who died in a plane crash in Texas in 1988.
It is therefore not surprising to find James R. Bath on the list of shareholders in
two other companies controlled by George W. Bush – Arbusto ‘79 Ltd. and
Arbusto ‘80 Ltd.
In the late 1970s, James R. Bath, a wealthy Texas entrepreneur, invested $50,000 in
these companies to get them off the ground. At the time, he was the U.S. business
representative for Salem bin Laden according to the terms of a 1976 trust agreement.
It came out later, in 1993, in an official U.S. document, that he was also the legal
representative of Khalid bin Mahfous.
The two entities founded by George W. Bush were later merged with Harken
Energy; all traces of these transactions have disappeared.
Khalid bin Mahfouz was very active in Texas at the time. During a deposition before
the Financial Crimes Enforcement Network (FinCEN), James R. Bath claimed to own
Skyway Aircraft Leasing Ltd. which in fact belonged to Khalid bin Mahfouz.
In 1990, Mahfouz procured a loan of $1.4 million for James R. Bath, allowing him
to buy a stake in the Houston Airport. Following Salem bin Laden’s death in
1988, Khalid bin Mahuouz took back this holding.
But the bin Mahfouz empire also shares common interests with American oil
companies, specifically concerning Central Asia in the area around the Caspian
Sea, which is coveted by these companies.
In the last few yeard, Khalid bin Mahfouz’s Nimir Petroleum signed exploration and
drilling agreements in the major Gulf States, Central Asia, from Oman to Kazakhstan,
and even in Venezuela.
In 1994, Nimir Petroleum agreed to partner with the Saudi group Delta Oil Company,
which had been trying for years to get a contract in order to build a gas and oil pipeline
between Turkmenistan and Pakistan – via Afghanistan. The main partner in the $5
billion project was none other than the American corporate giant Unocal Corp.
Negotiations with the Taliban had come to a deadlock, and the Delta Oil-Unocal
consortium was undoubtedly counting on Khalid bin Mahfouz’s support in the
Besides, Khalid bin Mahfouz was not the only Saudi businessman to take a strong
interest in Central Asia’s oil at the time. Starting in 1991, Dallah Albarakka, a group
controlled by Saleh Abdullah Kamel, was also getting involved in the exploitation of
several sites in Kazakhatan and Uzbekistan.
~ ~ ~
In the world of the BCCI, there is another facet of the BCCI that is little known. It
involves investments made by the bank’s main protagonists in the luxury goods
industry, through a financial group in the Gulf controlled by Khalid bin Mahfouz’s cicle.
In 1982, a group of investors from the Middle East created a financial company with
the goal of building a diversified portfolio, with assets estimated today at more than $5
billion. The group concentrated on reputable and financially stable investments in the
areas of publishing, distribution, watch-making, and luxury goods.
The company, Investcorp, is located in Manama, the capital of Bahrain, and was
founded by the region’s most elite oilmen and financiers: Nemir Kirdar, an Iraqi
businessman and former manager of Chase Manhattan Bank in the Persian Gulf;
Ahmed Ali Kanoo, who died in 1997; Ahmed Zaki Yamani, former oil minister of
Saudi Arabia; and Abdul Rathman Salim Al Ateeqi, former oil minister of Kuwait.
Investcorp Investment Holdings Corp., is registered in the Cayman Islands, and its
main subsidiary overseeing international activities, Investcorp SA, is registered in
Inspired by the movement toward autonomy and the financial emancipation of the
Persian Gulf after the first oil crisis – especially in view of large Western financial
institutions – Investcorp was established on similar principles to those that led to the
creation of the BCCI in 1972. Though the two entities are not in the same industries –
the BCCI is a banking institution, while Investcorp is meant to be an investment
company – they were both created with the joint support of the Emirate authorities,
Saudi investors, and Western banks (Bank of America in the case of the BCCI, and
Chase Manhattan in the case of Investcorp).
In addition, their holding companies were located in the same offshore centers (the
Cayman Islands and Luxembourg).
The two entities also have common shareholders. In addition to its two main
executives (Abdul rahman Salim Al areequ, chairman, and Nemir Kirdar, president
and CEO) as well as representatives from the government of the United Arab
Emirates, Investcorp also has an executive committee made up of eighteen of the
group’s main shareholders, many of whom were shareholders in the BCCI.
At least four of these members represent the interests of, or are closely involved with,
Saudi businessmen who played a major role in the BCCI affair. They are Abdullah
Taha Bakhsh, Mohammed Abdullah al Zamil, Bakr Mohammed bin Laden, and
Omar Al Aggad.
Between 1976 and 1982, Abdullah Taha Bakhsh – an investor in Harkin Energy,
recall – was the representative for the bin Laden family in the United States. He also
represents Khalid bin Mahfouz’s financial interests in the Middle East. What’s more,
several sources emphasize the fact that he represents the interests of Khalid Salim
bin Mahfouz on the board of directors of Investcorp. In fact, bin Mahfouz holds a 25
percent stake in Investcorp, thanks to Bakhah’s services....
Investcorp’s investments have not always been judicious, and the company is
caught in several litigations, notably in the United States, Great Britain, and
France for fraud and breaking accounting laws.
The context of Investcorp’s creation, as we explained, is similar to that of the BCCI in
the early 1980s, especially in the discovery of fraudulent practices....
~ ~ ~
Khalid bin Mahfouz, then, temporarily personified for the kingdom the official
instrument of its own contradictions in regard to the world and in special regard to
Osama bin Laden, who became the terrorist it should have disowned....
* * *
April 17, 2003
Law Firms See
Opportunities in Iraq
By Anthony Lin, New York Law Journal
The Central Intelligence Agency recently estimated the gross national product
of Iraq at somewhere in the neighborhood of $59 billion. It is a fair bet that the ultimate
cost of the country’s postwar reconstruction will far exceed that figure.
So while many issues relating to how Iraq’s reconstruction will proceed and who will pay
remain unsettled and highly controversial, lawyer’s have already begun considering how
they and their clients can get a piece of the action....
David Furman, a real estate partner with the New York office of Gibson, Dunn &
Crutcher, has also dealt with his share of Islamic financings. Investors from the
wealthy Persian Gulf states, he noted, are among those foreign investors most
heavily invested in U.S. real estate.
A substantial enlargement of this group of investors will be another boon to American
lawyers, he said. Iraq, he added, has historically possessed a large class of merchants,
traders and businesspeople. One of his major clients, the investment group
Investcorp, is headed by an Iraqi exile, Furman pointed out.
This merchant class is likely to regroup swiftly, he said, and he expects many will
join the apparent clamor by Middle East investors to sink their petrodollars into
American office buildings and shopping centers.
Gibson Dunn and other American law firms are already plugged into the Middle
Eastern investment groups that gather prospective investors into syndicates, said
“As wealth spreads among the Iraqi people, it’ll create much more opportunity for
my clients,” he said.
For more, GO TO > > > Buzzards on the Bar
* * *
May 24, 1996
Stock offering by Saks
a boon to Bishop Estate
Its holdings gain more than $24 million in value
on the first day of trading
By Rick Daysog, Honolulu Star-Bulletin
Bishop Estate's investment in Saks Fifth Avenue increased by more than $24 million
in a single day.
The charitable trust owns 4.1 percent of the upscale department store chain's parent,
Saks Holdings Inc., whose shares soared with the successful launch of its initial
public offering Wednesday.
The stock, priced late Tuesday at $25 per share, closed Wednesday at $34.621/2 on
the New York Stock Exchange, a 38.5 percent increase.
That gave Bishop Estate a paper profit of $24.1 million for the 2.5 million Saks shares it
owns. Saks' stock closed on Thursday at $32.50 a share but regained 50 cents on
Friday to close at $33.
The estate stressed that it has not realized any gains because it has not sold any of its
"We're very pleased with the results there," said Kekoa Paulsen, spokesman for the
estate. "(But) bottom line, it's a paper gain."
Paulsen said the estate is positive about Saks' future and its current management,
noting that the investment in Saks is for the long-term. Bishop Estate purchased its
stake in Saks Holdings back in March 1993 from Bahrain-based Investcorp S.A. for
about $50 million.
Bishop Estate, the state's largest private landowner, lists about $1 billion in assets but
critics have said that figure may be as high as $10 billion.
Founded in 1867, Saks Fifth Avenue was privately held and operated as a division of
Gimbel Bros. Inc. until it was purchased by British giant BAT Industries Plc in 1973. In
1990, BAT sold Saks to Investcorp for $1.6 billion.
The retailer currently owns 45 Saks Fifth Avenue department stores, 19 Off 5th outlet
stores and the Folio catalog.
In Hawaii, Saks operates an off-price outlet at the Waikele Center and has expressed
an interest in opening a department store in central Honolulu.
In Wednesday's public offering, Investcorp sold 16 million shares in Saks, or about a
quarter of the retailer's equity. Saks said it would use the proceeds to pay down debt,
which it listed as nearly $976 million.
An offering prospectus said that Bishop Estate's 4.1 percent stake represents the fifth
largest block of the company's stock. Investcorp is the largest with 17.3 percent of the
Saks' equity, followed by SIPCO Ltd., a Cayman Island-based investor, with 17.28
Honolulu Star-Bulletin Business
* * *
November 1, 2001
Heath points finger at Safex for
State Theatre website fraud
By Andrew Donaldson, The Sunday Times
The Special Investigating Unit's former head, Judge Willem Heath, has recommended
that State Theatre slush fund and sponsors' money lost in "fraudulent" investments be
recovered from the South African Futures Exchange .
The exact amount to be recovered is not known but almost R47-million was invested
with broker Scott Asset Managers.
The recommendation is contained in Heath's preliminary report on the unit's
investigation into alleged maladministration of public money by the former Performing
Arts Council of the Transvaal. This follows the apparent failure by the SA Futures
Exchange to remove Scott Asset Managers from the membership list on the exchange's
website after it ended SAM's membership in October 1999.
As Heath put it: "The result was that, even after SAM ceased to be a member of Safex,
the State Theatre invested more money with SAM." The company, together with a
related concern, Investcorp, was run by Keith Scott, a former Pact Opera "ad hoc"
Heath has noted: "There is no doubt ... that Scott acted fraudulently and in a
criminal fashion in deceiving the State Theatre out of a lot of money. It is
recommended that criminal action ... be pursued vigorously."
Heath also recommended that the Department of Arts, Culture, Science and
Technology consider action against the then State Theatre board members, including
financial director Johann van den Berg and CEO Alan Joseph, to "recover losses
The Sunday Times is in possession of a copy of an account, signed by Scott, to Van
den Berg, the theatre's financial director, which details the theatre's capital investments
with SAM. Heath described the account as "blatantly fraudulent", designed to show
phenomenal growth in investment when the opposite was the case.
It nevertheless reveals that between August 1998 and December 1999, the theatre
invested R39.7-million. Also in December, the theatre invested a further R7-million
which is not reflected in the SAM account.
This was after a State Theatre Ballet/Dance board meeting in November 1999 in which
members were warned of the high risks involved in futures and derivatives.
Among them was former Johannesburg Mayor Sam Moss, then chairman of the State
Theatre and a member of its finance and audit committee. At a second meeting, Moss
was again warned and urged to rectify the situation.
But, despite this, the board went ahead with the investment.
When, following the referral of a R3-million cheque, in Heath's words, "the bubble
burst", both SAM and Investcorp were placed in liquidation.
"It became apparent that a large number of other people also invested their money with
SAM and Investcorp and that the State Theatre was just one (albeit the largest) of a
large number of investors who appeared to have invested a total of more than
R100-million in SAM," Heath reported.
"The liquidators are in the process of tracing assets and it would probably still take quite
a while before the liquidation of SAM and Investcorp would be finalised."
The State Theatre has recovered about R28.5-million of its investment with SAM....
* * *
January 10, 2001
Stratus Technologies Receives $115 Million
Investment from DB Capital Partners,
Compaq and Intel
LUXEMBOURG, MAYNARD, MA, and NEW YORK, NY - Stratus Technologies and
its majority shareholder, Investcorp, a global investment company, today announced
that DB Capital Partners, Compaq Computer Corp. (NYSE: CPQ), and Intel Capital
will make a combined investment of $115 million in Stratus, of which DB Capital will
invest $50 million....
Stratus Technologies, parent company of the Stratus Group of companies, is a
premier supplier of computer systems, services, and technology for mission-critical
applications that must not fail, generally known as fault-tolerant computing. Stratus
serves the banking, securities, e-commerce, manufacturing, and other industries where
the cost of computer-related downtime can be very high.
The investment in Stratus Technologies by DB Capital, Compaq, and Intel Capital will
be in the form of a preferred stock purchase. The shares will be acquired from affiliates
Goldman Sachs and Salomon Smith Barney are serving as advisors to both Stratus
and Investcorp on this transaction.
At the conclusion of the transaction Stratus management and Investcorp will retain
majority interest and voting control of the company.
Christopher J. Stadler, a member of Investcorp's Management Committee, said, "Our
continuing partnership with the management team and employees of Stratus has
already exceeded our goals. In less than two years, Stratus has convincingly achieved
its strategic objectives and established a strong record as an independent company."
The original company was founded in 1980. Ascend Communications acquired
Stratus in 1998 and subsequently sold back the enterprise computing segment of the
business to Stratus management and Investcorp in 1999....
According to Robert G. Sharp, a managing director at DB Capital, "Our investment in
Stratus is well aligned with DB Capital's portfolio strategy to invest in high-growth
technology companies that have a highly experienced management team, successful
operating track record and solid customer traction."
About DB Capital Partners, Inc.
DB Capital Partners is the private equity investment group of Deutsche Bank, with
offices in New York and San Francisco. DB Capital targets growth capital investments
and buyouts in technology, telecommunications and new media, as well as consumer
products and industrial companies.
In 2000, DBCP invested $1.5 billion in equity capital globally.
Recent technology investments include Paradigm4, Displaytech, Exult, eTime
Capital, iLumin Corporation, GlobalSight and PC On Call.
About Intel Capital
Intel Capital, Intel Corporation's strategic investment program, focuses on making
equity investments and acquisitions to grow the Internet economy, including Internet
infrastructure, content and services in support of Intel's strategic interests. In Europe,
Intel Capital invests through Intel Atlantic, Inc., a subsidiary of Intel Corporation.
For more information, visit www.intel.com/capital.
Investcorp is a leading global investment group with offices in London, New York and
Bahrain. Since 1982, it has completed transactions in North America and Western
Europe, with a total acquisition value of approximately $19 billion.
In addition to Stratus Technologies, Investcorp and its clients currently have
investments in U.S. companies including The William Carter Company, Jostens, Inc.,
Werner Holdings, TelePacific Communications and Independent Wireless One.
U.S. investments that have been taken public by Investcorp include Prime Service,
Tiffany & Co., Circle K Corporation, Saks Fifth Avenue and CSK Auto Corporation.
In Europe, Investcorp and its clients currently have investments in Avecia (formerly
Zeneca Specialties), Gerresheimer Glas, Polestar, Welcome Break, CityReach,
and Helly Hansen.
– Additional information may be found at www.Investcorp.com.
About Stratus Technologies
Stratus Technologies, its subsidiary Stratus Computer DE of Maynard, MA, and its
worldwide network of other Stratus companies, offers a proven range of continuously
available computer platforms, application solutions, professional services, and
technologies for mission-critical business operations.
Many Stratus customers are highly visible industry leaders such as prominent U.S.
securities firms, major credit card companies, the largest stock exchange in Asia,
the largest options exchange in the world, and 15 out of the world's 20 largest
The Stratus 24-7 Technologies Division licenses technology for fault tolerance to
technology companies. Stratus has offices and a comprehensive network of customer
service centers worldwide, and 1,100 employees.
* * *
March 28, 2003
In war the stakes are...slower
Vernon Silver reports from Bahrain, Bloomberg News Service
Gulf War I didn't stop a banker from selling a slice of US and European companies to
rich Arabs, but this time it's harder.
In the 1991 Gulf War, executives at Investcorp Bank dodged United States Army
tanks on Saudi highways as they sped to Riyadh and Jeddah to sell clients stakes in
Saks Fifth Avenue, the US department store chain their employer had just bought for
Twelve years later, Investcorp employees are again prowling a war-torn Persian
Gulf, trying to convince Arab investors to buy shares in private companies in the
US and Europe.
Nemir Kirdar, the Iraqi-born founder and chief executive of the Bahrain-based
Investcorp, says it's business as usual. War just makes finding investors a bit
Kirdar also faces other challenges as he goes after the $US1.6 trillion ($A2.67 trillion)
his bank estimates gulf investors control.
Having made its reputation by putting $US20 billion into Gucci Group, Tiffany and
other high-profile companies over the past two decades, Investcorp is now peddling
some less prestigious outfits.
Today, Kirdar is trying to persuade clients to buy stakes in Arizona and Tennessee
real estate or to participate in corporate buyouts with less cachet. They include MW
Manufacturers, the US window and door maker that Investcorp bought in January for
$US188 million, and PlayPower, a maker of water slides and running tracks that
Investcorp helped buy in February for an undisclosed price.
In addition, returns, which averaged 30 per cent a year between Investcorp's 1982
beginnings and 1992, have fallen in the past decade, bringing the 20-year average
down to 25 per cent, according to Investcorp.
The bank's clients own $US3 billion to $US4 billion of stakes in companies Investcorp
has bought and manages for them, Kirdar says. Investcorp in most cases does not
disclose returns on specific investments, citing client privacy. It bases its overall
historical returns on what clients would have made had they invested in every
Investcorp buyout that has been sold or written off as a loss.
Returns on the shares of Investcorp itself, a publicly traded investment bank that makes
its money from management fees charged to clients and from taking stakes in its own
investments, have also suffered.
In 2001, Investcorp earned $US50.1 million, its lowest profit in 13 years - down from a
high of $US125.8 million in 1999, according to the company's 2001 annual report.
Investcorp is owned 40 per cent by Investcorp executives, 40 per cent by a group of
about 50 rich Arab investors and 20 per cent by about 7000 holders of its thinly
The shares are down 69 per cent from their high of $US4.69 in 1998, closing at
$US1.45 on January 22, the last day they traded. Lately, there have been more write-offs and fewer sales for Investcorp, which has offices in Bahrain, London and New
Kirdar blames the global economic slump for driving down the value of companies
Investcorp has bought, making him unwilling to sell. As a result, the bank is holding
some investments longer than the four to six years it prefers.
One example: It still owns a stake in Carvel Corp, the US ice-cream franchiser it
bought control of in 1989.
In 2001, Investcorp wrote off investments in computer networking companies
Colo.com and CityReach International, costing the bank $US65 million.
In 2000, it wrote off a stake in Burnham Service Corp, a warehouse and transport
company that filed for bankruptcy protection, costing it $US113 million.
"It's not a very happy picture," Kirdar says from his office, decorated with photos of
him with Britain's Prince Charles and former prime ministers Margaret Thatcher and
John Major, in a town house in London's Mayfair district.
Salman Abbasi is a former Chase banker who supervises the placement of
investments with clients for Investcorp. He says Arabs who live in the Persian Gulf
region have not been pulling money from the US in protest over the Iraqi conflict or
concerns that funds would be frozen in a terror crackdown. Abbasi says his clients are
even more keen to invest in the US.
"Towards the end of last year, we placed tons of money in US real estate -
$US270 million," he says.
Investcorp's holdings in two dozen companies - worth a total of about $US1 billion -
include a $US58.6 million stake in Carvel, a $US29.2 million stake in Norwegian
sportswear maker Helly-Hansen, a $US60.2 million stake in UK highway service area
operator Welcome Break Group and a $US161.3 million stake it kept in Saks,
according to the 2001 annual report.
The report does not disclose the value of stakes owned by Investcorp clients or
percentages of ownership the stakes represent.
Investcorp's clients may be in the Gulf region, but 66 per cent of the companies they
own are in North America and the rest are in Europe.
Investcorp is unlike most other buyout firms, which first raise pools of cash from
investors then spend the money acquiring companies that they hope to restructure and
sell at a profit.
Investcorp first spends its own money to buy companies then generally sells 90 per
cent of each investment to its roster of 1400 investors in Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and the United Arab Emirates.
# # #
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Originally posted: June 17, 2003
Last Update July 29, 2009, by The Catbird
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