Naguib Sawiris abuses U.K. bankruptcy laws for personal profit

Everyone with a company going bankrupt knows the United Kingdom is the best harbor for sinking ships. That's because the U.K. is known for its controversial "pre-pack administration deals," which allows a company to clear most of its debts by going into administration with a buyer already lined-up to purchase the company's valuable assets immediately. What's more, the bankrupt entity and the arranged buyer are often revealed to be owned by the same person. The bankrupt company and its boss win big. And creditors, company staff, and customers know nothing until the deal is done and all their money is gone.
Such was the case with the bankruptcy of Naguib Sawiris' Greek multinational telecom company Wind Telecom, which was ultimately acquired by Naguib Sawiris' company, Weather Investments through a pre-pack deal. How did Naguib Sawiris manage to take advantage of U.K. bankruptcy laws with Greece's third largest telecom company? Knowing Wind Hellas was about to go bust, Naguib Sawiris moved Wind Hellas' assets and changed its address from Luxembourg to Britain. He then claimed the company's one-man office in London was its headquarters. And, just two weeks later, Naguib Sawiris began the administration process for a pre-pack deal, Wind Hellas collapsed, and over a third of its debt was cleared.
Naguib Sawiris robbed Wind Hellas' creditors of £1.3 billion by the end, including £9 million owed to the Royal Bank of Scotland (RBS is 84 percent owned by taxpayers ). Aberdeen Asset Management and Lloyds Banking Group also faced major losses.
The Wind Hellas pre-pack became the largest in British corporate history. Who oversaw the deal? A 33-year-old "businessman" named Matthew Tippetts, who had no experience with this level of corporate insolvency and had graduated from business school just five years earlier.
As The Sunday Times reported, Tippetts conducted the deal for Naguib Sawiris using mobile phones and a free email account; photos of Tippetts dancing with young women and "swigging from a wine bottle" can be found on social networking websites. A very serious young man indeed. When the media pointed out Tippetts' lack of experience in handling the pre-pack deal, he fought with The Sunday Times' claim that he had no relevant business experience by stating he had more experience with corporate restructuring than most company directors. I guess you learn a lot working as a summer associate at Lehman Brothers and Merrill Lynch.
Like all mysteries Naguib Sawiris is involved in, it wasn't that mysterious. "Tippetts has confirmed he was being paid by Weather Investments throughout the administration" of Wind Hellas, The Sunday Times reported on March 7, 2007.

Naguib Sawiris: The Bribe Man, Continued . . .

Egyptian billionaire Naguib Sawiris is famous for more than building a global telecom empire. He's infamous, in fact, for his involvement with bribe and corruption everywhere from Israel to Italy.
Israeli newspaper Maariv claimed Naguib Sawiris paid bribes to Israeli Minister of Defense Ehud Barak and his wife Nili Priel to help him win approvals for Orascom Telecom Holding to increase its stake in Israeli operator Partners Communication. In Europe, the Italian financial police conducted an investigation of Naguib Sawiris over USD 135 million in consultancy fees that were suspected to be disguised kickbacks during the purchase of the majority stake in Wind Spa by a consortium led by Naguib Sawiris' Orascom Telecom Holding.
The subject of Naguib Sawiris' bribery was also raised in the London High Court case filed against him by his former Italian business partner. During the trial, lawyers pressed Naguib Sawiris about how he secured his lucrative telecom license in the Congo with Rami Antaki by purchasing 100 percent of Libertis Telecom (If you're not already familiar with the story of how Naguib Sawiris and Antaki paid off the Congolese President's daughter, click here. ) During the court case, Naguib Sawiris lied by claiming his friend Rami Antaki's company had already "been granted a telecoms license and completed all the groundwork associated with obtaining that license" before he was brought into the Congo deal. However, Naguib Sawiris' statement contradicted evidence provided by Jack Hazout, a telecom consultant who refused to go through with a separate deal with Congolese President Denis Sassou Nguesso at an earlier juncture due to the fact that the government's preconditions were that his daughter "Joujou" would receive a stake in the telecom company before a license was granted.
"From my own knowledge and from what Mr. Antaki has told me," Mr. Hazout said, "Mr. Sawiris' account is not correct . . . the letter from the Congolese government was not a license and, as far as I am aware, no license was granted until the government's preconditions had been met after Mr. Sawiris became involved."

Naguib Sawiris: The Hypocrite and the Dictator

In the Arab world, the reputation of businessmen often comes down to his relationship with dictators and corrupt political leaders.
This is particularly true in the case of telecom operators pushing for contracts in war-torn Iraq. Whereas most Western entrepreneurs were frightened to enter the region, let alone set up business there, Naguib Sawiris, the Egyptian chairman and CEO of Orascom Telecom Holding, visited Baghdad numerous times after the fall of Saddam Hussein in 2003. Soon, Naguib Sawiris' $160 million investment in Iraqna, an Orascom subsidiary, became Iraq's leading cellular network, and gained profits of $30 million to $40 million a year, less about $2 million a month in security costs. Naguib Sawiris was different than other people in the Arab world, though, because he supposedly "supported the overthrow of Hussein in Iraq," the media widely reported.
What the media didn't widely report is that one of Orascom Telecom's shareholders bribed Iraqi officials to support its winning bid for one of three GSM licenses awarded in Iraq in 2003, according to a May 2004 Memo authored by John Shaw, U.S. Deputy Undersecretary of Defense for International Technology Security.
Shaw discovered that Nadhim Auchi, a controversial British-born Iraqi billionaire, had an equity interest in Orascom's bid and engineered the disbursement of bribes to leading Iraqi officials who determined which company would win the bid. Auchi was quoted in news outlets as being one of Saddam Hussein’s former "financiers" and also confirmed he was a minority shareholder in Orascom, as news outlets like MSNBC reported. Auchi isn't the only dangerous Orascom shareholder. Ironically, Forbes, which features Naguib Sawiris on its billionaire's list, also reported that the radical Islam group Hamas released financials showing it held "big stakes in the Cairo-based cell phone high-flier Orascom Telecom."

Censorship : Is Naguib Sawiris more powerful than freedom of speech?

It seems that shady Egyptian businessman Naguib Sawiris is stronger than freedom of speech on the Internet. Sawiris actually figured out a way to censor one of my blogs (www.blogster.com/thetruenaguibsawiris), because the information mentioned on it (which was proven and sourced) did not fit with the reputation he’s trying to build.


My blog before Naguib Sawiris’ censorship: the article was hard on the man, but based on facts and sources

Here’s the story: in late June, I created my own blog on the blogging site Blogster. I used the website to write, with journalistic materials found on the Web, what I think of Sawiris, and what a corrupt man he is. It certainly did not please him; a few days later my blog was shut down and I was banned from the Blogster community.

My blog has since been shut down and I have been banned by Blogster: Thank you Mr. Sawiris!

So Blogster is afraid of this rich and powerful man! Fine! Thank God other blogging sites are more courageous (notably Wordpress) and won’t delete publicly useful information just because a billionaire demands it.
Luckily for me (and unluckily for Naguib Sawiris), the fact that I was banned from Blogster has made me even more willing to spread the truth about Naguib Sawiris’ misconduct.

Naguib Sawiris' Ventures Saddled with Debt. With Arafat gone, who will save Naguib Sawiris?

Naguib Sawiris is a billionaire in a family of billionaires, and because of this fact he's always been able to turn to his brothers or his father when he was in need of cash. Yet there have been moments in history when Naguib Sawiris reached out to less-than familial people as a result of running his companies into debt and taking unsound risks.
In 2001, for example, Naguib Sawiris bid what analysts said was a too-high price of USD 737 million for an Algerian license in what became Djezzy, Naguib Sawiris' "crown jewel" mobile operator in Algeria. Naguib Sawiris needed financing to complete the deal but bankers recoiled from Orascom Telecom due to its financial status. "The company was heavily indebted. At the time, nobody wanted to touch Orascom," an Arab banker said in a Time news story published on April 24, 2005. Orascom's expansion wrecked its balance sheets, and financial statements from 2001 showed that Orascom lost around USD 102 million in revenue, with Orascom Telecom holding almost four times its equity in debts totaling GBP 10 billion. For a billionaire, Naguib Sawiris sure has a hard time managing his companies' money. In the process of selling off assets to pay his debts, Naguib Sawiris got financial support from an unusual source: the late Palestinian leader Yasser Arafat. Naguib Sawiris told Time reporters that he met Yasser Arafat only twice. And yet audits of Arafat's financial life showed that Arafat used funds allocated to support the Palestinian cause to rescue Naguib Sawiris from financial difficulty in 2001 by putting huge cash injections into Orascom and three of its subsidiaries.Arafat's first investment in Orascom was around USD 65 million, which was put into Algeria-based Djezzy in 2001. Arafat also put USD 52 million into Orascom's network in Tunisia, and when Naguib Sawiris proposed Arafat invest USD 60 million in Orascom's holding company in the form of a convertible bond, Arafat asked him to reduce it to USD 20 million. Over the next year, Arafat and his financial adviser, Mohamed Rachid -- who was accused by the Palestinian Legislative Council for squandering public funds -- poured more than USD 200 million into Orascom Based on Arafat's contributions to Orascom he should have taken possession of the company or at minimum become a major shareholder. And yet he did not. That's because Naguib Sawiris paid Arafat in kickbacks to compensate the political leader for the money he contributed. Flash forward. In November 2009, Algerian authorities charged Orascom with a USD 600 million tax claim and penalties for fiscal years 2004 to 2007. In 2010, Wind Hellas, Naguib Sawiris' Greek subsidiary of Italy's Wind Telecomunicazioni, another of Naguib Sawiris' acquisitions, went bankrupt. Too bad Arafat isn't around to bail out Naguib Sawiris again. Naguib Sawiris seems to get a lot accomplished by stealing public funds from a respected leader in two simple meetings.

Orascom’s boss Naguib Sawiris called “a liar” by the UK High Court

The Egyptian tycoon Naguib Sawiris has been ordered by Lord Justice Nicolas Patten to pay his former partner more than 75 millions euros.
A lawsuit concerning Europe's largest leveraged buyout was tried in the U.K. High Court in 2009 and will be heard by the Court of Appeal in July 2010. In the court case, Lord Justice Nicolas Patten ordered Egyptian billionaire Naguib Sawiris to pay his former Italian business partner more than EUR 75 million ($104 million) over the acquisition of Wind, a telecommunications company. In 2005, Naguib Sawiris completed the deal using a strategy his business partner designed.
According to court documents, Naguib Sawiris' business partner stated in his case that he introduced the proposed acquisition of Wind to Naguib Sawiris, who had no relevant contacts with Wind, Enel, or the Italian government, and no direct experience of or standing in the telecommunications market. He argued that Naguib Sawiris agreed to give him a one-third equity stake worth billions in an investment company called Weather Investments that was used to acquire control of Wind. Naguib Sawiris countered that he made no such agreement, and that his partner deserved no more than a 1 percent fee. Naguib Sawiris ultimately acquired Wind through Weather in a deal worth more than EUR 12 billion ($18.7bn) from Italian utility Enel. Naguib Sawiris told the court he was bad with dates, and the judge described him as being "equally dogmatic about and often insistent" that certain of the meetings described by his business partner (for example, the 22nd April 2003 meeting in Cannes) did not occur. The judge found evidence sufficient to be satisfied that the aforementioned "meeting did take place" between Naguib Sawiris and his partner, as Naguib Sawiris's passport entries and the manifests of his private jet indicated that he was indeed in Cannes on 22nd April. The judge referred to Naguib Sawiris' "lack of accuracy" during the trial and said at times he "did resort to bluster and, on one occasion, told what can only be described as a deliberate lie about his involvement in other litigation."
"For this reason, I have approached his evidence with caution," the judge said of Naguib Sawiris.
Despite the ongoing litigation, Naguib Sawiris is rapidly trying to sell a 10 percent stake in Weather Investments.

Naguib Sawiris seeks to profit from misery in Greece

Egyptian telecom tycoon Naguib Sawiris is taking an opportunity to profit in another impoverished country. As one of Egypt's richest businessmen, Naguib Sawiris is no stranger to living the good life while surrounded by some of the poorest people on earth.
As the owner of WIND Hellas Telecommunications, the third major telecom provider in Greece with annual turnover of EUR 1.26 billion as of 2008, Naguib Sawiris said he is "not ruling out" a second debt restructuring at his company. Naguib Sawiris added that competition in the Greek mobile phone market has been "fierce" and stated that the "price war will be catastrophic for everyone." Naguib Sawiris doesn't hide his desire to profit while Greeks struggle to survive. In Germany, Chancellor Angela Merkel sent the Greeks a EUR 22 billion lifeline to help the country avoid bankruptcy.

Naguib Sawiris, meanwhile, doesn't care about Greece's survival. A true capitalist, he plans to make gains off of the EU's most fragile member. "We believe there is a genuine chance that prices will start stabilizing, if not even go back to a higher level," Naguib Sawiris said of Greece, "so we can all return to profitability."

Naguib Sawiris: prospering under Mubarak’s Governement

A story in The Guardian emphasizes the connection between Naguib Sawiris business and politic backup, using President Mubarak as a sales man for Orascom.


As one of Egypt's wealthiest businessmen, it doesn't take a genius to figure out how telecom tycoon Naguib Sawiris has managed to succeed. It's well known in the mainstream media that Naguib Sawiris and his family have deep political connections to President Hosni Mubarak. As The Guardian reported, "The Sawiris family has continued to prosper over the past three decades under Hosni Mubarak's government." Naguib Sawiris profits both personally and commercially from his connection to Egypt's government elite.

To what extent are the Sawiris family and President Mubarak's family involved?

Mubarak's son, Alaa Mubarak, is a significant shareholder in Orascom and its affiliates, as well as a personal friend of Sawiris: privileged sources believe Alaa Mubarak's positive intervention on Naguib Sawiris' behalf is what helped Mobinil win the second GSM license in Egypt. In an interview with Al Arabiya News on July 18, 2004, Naguib Sawiris said he was "satisfied" with the Mubarak government. Mubarak must be satisfied, too. Because when Orascom encountered trouble with its Syrian venture, Mubarak went to Syria to try and settle Naguib Sawiris and Orascom's mess with Syrian President Bashar Al Assad.

The family ties don't stop at business. Naguib Sawiris, Alaa Mubarak, and his brother Nassef Mubarak are such close friends that they attended several football matches and stayed together in France during the 1998 World Cup. Naguib Sawiris' wife, Yousriya Loza Sawiris, serves as chairman and secretary general of the Sawiris Foundation, and President Mubarak's wife, Suzanne Mubarak, is on the board of directors.

At this point it wouldn't be surprising if someone called Naguib Sawiris and Mubarak answered the phone.