Target of Deadly Protests In Syria Has US Investments (FORBES)
Protesters in the Syrian town of Daraa have directed their wrath at Rami Makhlouf, the rich and powerful cousin of president Bashar al-Assad, and an emblem of corruption in Syria. They have chanted “Makhlouf you thief,” and on Sunday burneda branch of Syriatel, the country’s dominant telecom which he controls with family members.
“Rami Makhluf is a powerful Syrian businessman who amassed his commercial empire by exploiting his relationships with Syrian regime members. Makhluf has manipulated the Syrian judicial system and used Syrian intelligence officials to intimidate his business rivals. He employed these techniques when trying to acquire exclusive licenses to represent foreign companies in Syria and to obtain contract awards.
Makhluf is the maternal cousin of President Bashar al-Asad and through this relationship, Makhluf has become a focal point of Syria’s telecommunications, commercial, oil, gas and banking sectors. Despite President Asad’s highly publicized anti-corruption campaigns, Makhluf remains one of the primary centers of corruption in Syria.
Makhluf’s influence with certain Syrian government officials has led to his being able to control the issuance of certain types of profitable commodities contracts. His close business associations with some Syrian cabinet ministers have enabled him to gain access to lucrative oil exploration and power plant projects. Makhluf’s preferential access to Syrian economic sectors has led to complaints about him from members of the Syrian business community.
Pursuant to E.O. [executive order] 13460, any assets that Makhluf holds under U.S. jurisdiction will be frozen, and U.S. persons are prohibited from engaging in business or transactions with Makhluf.”
That hasn’t stopped Makhlouf from owning a piece in U.S.-based properties through a foreign publicly-traded company. Via a holding company called Al Mashrek Global Invest Ltd., Makhlouf owns nearly 6% of U.K. company Gulfsands Petroleum. The London-based firm has oil and gas properties in the Gulf of Mexico, mostly offshore Texas and Louisiana. Gulfsands is now trying to sell them, because it considers them “non-core” businesses.
Gulfsands operates in Syria, where in June 2007 it discovered an oil field in the northeastern corner of the country. That same month itannouncedthat Makhlouf was investing £10.15 million in the company—a slight discount to that day’s closing price on the London Stock Exchange.
“These funds will assist us to accelerate our activities in Syria including the evaluation of the future development of our recent oil and gas discovery at Khurbet East,” said the company’s chairman and CEO.
Besides his interests in oil and gas, Makhlouf controls Syriatel. In 2001, the Syrian government had awarded the license to build operate and transfer a mobile network to Orascom Telecom, a leading Middle Eastern telecommunications company owned by Egyptian billionaire Naguib Sawiris. Orascom picked up a 25% stake in Syriatel, but things quickly deteriorated, and Orascom sued its local Syrian partner Makhlouf for “persistent attempts…to assume management control of Syriatel…with a particular motive to be able to sign solely on all bank accounts…” Sawiris pulled out in 2003.
Makhlouf who’s now chaiman of Syriatel describes himself in the company’s annual report as “one of Syria’s most important businessmen with deep expertise in the creation of successful companies in a wide range of industries…” Syriatel generated $1 billion in revenues in 2009 (last year it released financials on its website); that’s 1% of Syria’s gross domestic product.