INVESTIGATING
INVESTCORP
Sightings from The Catbird Seat
~ o ~
September 2, 2005
BinLaden shareholder in European
parking management company
FrontPagina.be
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 Islands.
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 space….
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.”
FOR RICHER
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 of Investcorp).
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 BinLaden 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 binMafhouz, 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 binLaden, 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.
www.frontpagina.be/article.php3?id_article=16
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For more, GO TO > > > APCOA: Vultures in the Parking Lot; The Strange Saga of BCCI
$ $ $
From Forbidden Truth: U.S. Taliban Secret Oil Diplomacy and the Failed Hunt for Bin Laden
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 bank’s collapse.
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 supporters.
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’ finances….
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)….
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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 fundamentalism.
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 allegations.
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….
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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….
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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 Mahfouz.
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 1994.
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 undertaking.
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.
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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 Luxembourg.
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….
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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….
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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 Furman.
“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
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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 stock.
“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 percent.
Honolulu Star-Bulletin Business
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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” chorus member.
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 suffered”.
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….
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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 of Investcorp.
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.
About Investcorp
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 banks.
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.
www.stratus.com
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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 $US1.6 billion.
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 harder.
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 traded shares.
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 York.
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
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.
– Bloomberg
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