Naguib Sawiris, The Bribe Man: Wherever he goes, we smell corruption.
Filed Under: Business, Politics | Posted: 06/28/2010 at 10:43AM
Comments | Region: Congo
Given the onslaught of recent media articles highlighting the flaws of corrupt Egyptian telecom tycoon Naguib Sawiris , it is not surprising to learn that Naguib Sawiris uses bribes to secure lucrative business deals.
"I’m the money man. Wherever I smell money, I go," Naguib Sawiris said at the 2007 3GSM World Conference. Naguib Sawiris may be the money man, but that’s because wherever he goes, we smell bribes. That was almost certainly the case when Orascom obtained a telephone license in the Republic of Congo by buying 100 percent of Libertis Telecom.
To secure the Congo deal, together with Rami Antaki, Naguib Sawiris agreed to do a "favor" for Congolese President Denis Sassou Nguesso. Naguib Sawiris promised the President’s daughter, Julienne Sassou Johnson (aka "Joujou"), a 20 percent stake in his company. The arrangement was organized so that Mr. Antaki would get a 15 percent stake in the telecom venture through a Mauritian company called Babybells–Mauritian offshore companies are a haven for evading taxes–and another 20 percent would go to the President’s daughter Joujou to fulfill the bribe. That’s 35 percent of Naguib Sawiris’ company reserved for pure corruption. It would be bad to suggest Naguib Sawiris is robbing his business partners of cash. But in this case, he’s also robbing his shareholders.
Things got complicated along the way. Around December 2005, Orascom Telecom sold Libertis Congo to MTN for around USD 100 million. MTN paid 100 percent of the purchase proceeds to Orascom and 35 percent of that total reserved for corruption was then paid by Orascom to Rami Antaki’s brother and Naguib Sawiris’ good friend, Christian Antaki, to an account at HSBC Cairo. Why did the funds go to Christian and not Rami? Because Rami was already in trouble for cheating on taxes in France while simultaneously collecting the French equivalent of state-subsidized welfare (Revenu minimum d’insertion, or RMI).
But instead of giving the 20 percent promised to the President’s daughter, Rami Antaki withheld the funds and started engaging in speculation with Orascom’s shares, using the opportunity to manipulate the stock price of Orascom using insider information, and make quick money. Things turned sour in 2006, when Orascom’s share price dropped considerably, and the money Rami Antaki owed Joujou was long overdue. In July 2006, the Congolese President stepped in and told Rami Antaki to pay his daughter immediately.
Rami Antaki quickly organized the transfer of money (on behalf of his brother Christian Antaki), wiring 20 percent of the sale proceeds to Joujou in mid-2006. The bribe was complete.
But stay tuned: there’s more . . .