A lawsuit, with details still vague, by a Qatari company against the Social Security Investment Fund (SSIF ) alleging it bought the fund’s stake in The Housing Bank for Trade and Finance was a hot topic of speculation in Jordan Sunday, with the main person in the centre of the case denying his knowledge of the issue.
On Saturday, SSIF Chairman Suleiman Hafez said that the fund was “surprised” to receive an e-mail on November 13 and a registered mail on November 26 with a hard copy of the subpoena to attend arbitration in a court in Zurich, Switzerland, claiming that SSIF had failed to implement an alleged agreement to sell its stake in the Amman-based bank for a company he did not identify.
Hafez said that the alleged agreement was signed on March 18, 2012, with the plaintiff claiming that SSIF had sold its 38.8 million shares in Jordan’s second largest bank and that it should pay $93 million as the penalty for not completing the sell-off.
Media reports on Sunday revealed that the company was owned by Qatari businesspeople, registered in the Central American country of Belize under the name of Al Musabalah Doha Capital.
However, former chairman of SSIF Yaser Odwan, whose signature allegedly appeared on the sale document as seller of the stake, denied his knowledge of the deal, adding he never met or was contacted by any means by representatives of the Qatari company.
“I have never heard of this company or the people involved in it,” Odwan stressed in remarks to The Jordan Times over the phone Sunday.
Describing the issue as “strange and shocking”, Odwan insisted that the alleged deal is a fraud.
“It can’t be anything but a fraud,” he added, explaining that SSIF presidents do not have the authority to sell any stake in any company without having the approval of a special investment committee that looks into the fund’s investments.
Selling such a “huge” stake in the Housing Bank, estimated at about $460 million, would also require the approval of the Central Bank of Jordan and the endorsement of a third party firm to evaluate the value of shares. Odwan noted that the SSIF owns nearly 16 per cent of the Housing Bank’s shares.
Qatar, through the Qatari National Bank, owns around 35 per cent of the bank’s shares, according to the former official.
“This means that the headquarters of the bank could be moved anytime to Doha,” he said.
“I have refused to sell stakes owned by SSIF in Jordanian companies to genuine, well-reputed Gulf investors,” he noted, saying that company which claims it bought the fund’s shares does not even have any business records.
Odwan said he was optimistic that the legal process would prove that the whole issue is nothing but a scam.
The Jordan Times tried to search for the name and the business activities of the company but could not find any records.
A government official, who preferred to remain unnamed, told The Jordan Times that authorities have also been trying to find information about the claiming company but to no avail.
Arbitration in the case in a Zurich court is scheduled to start in the near future, said the official.
Legal expert Qais Sharairi said that it would be an uphill battle for SSIF solicitors to prove that the deal was an act of fraud.
Commenting on Odwan’s remarks that selling a stake in a bank should be approved by the central bank or a special investment panel, Sharairi said proving that the central bank was not notified by the deal would not be helpful in the case as courts would only look at the documents of the agreement.
An official at the Housing Bank said that the top management was also surprised by the emerging deal, which appeared “all of a sudden”.