lundi 12 juillet 2010

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.

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