Lebanon bank chief denies sending $400m abroad

Lebanon bank chief denies sending $400m abroad
Lebanon's Central Bank Governor Riad Salameh speaks during a news conference at Central Bank in Beirut, Lebanon, November 11, 2019. (Reuters)
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Updated 19 January 2021

Lebanon bank chief denies sending $400m abroad

Lebanon bank chief denies sending $400m abroad
  • Swiss, EU authorities call for cooperation on money laundering probe

BEIRUT: Lebanon’s central bank has denied allegations that its governor, Riad Salameh, transferred up to $400 million abroad along with his brother and an assistant.

The bank’s claim follows an announcement by Swiss authorities of an investigation into money transfers by Salame.

The Swiss attorney general’s office said it had requested legal assistance from Lebanon in the context of a probe into “aggravated money laundering” and possible embezzlement tied to the Lebanese central bank.

Salameh has denied any wrong-doing, describing the claims as “fabrications” and “false news.”

In a statement on Tuesday, the Banque du Liban said: “Salameh, as always, abides by the Lebanese and international laws in force, and cooperates with all parties concerned.”

Lebanon’s pro-Hezbollah Al-Akhbar newspaper said the same day that Lebanon had received an official request from EU and Swiss authorities to provide judicial assistance in an investigation into financial transfers involving Salameh.

According to the newspaper, European investigators are seeking information on bank transfers totaling $400 million made by Salameh, his brother Raja and assistant Marianne Hoayek.

Earlier in the day Justice Minister Marie-Claude Najm confirmed that she had received a request from Swiss judicial authorities to cooperate on an inquiry into money transfers by Salameh.

The newspaper said: “The investigation into criminal behavior does not concern Salameh alone. Rather, it will have to do with the Banque du Liban and its affiliated institutions, especially the Finance Bank, Middle East Airlines (MEA), Intra Bank and Casino du Liban.”

President Michel Aoun and Hassan Diab, the caretaker prime minister, have been informed of the case, the newspaper said.

Al-Akhbar quoted sources, which it did not identify, saying: “The European authorities are studying Salameh’s case as part of a file that includes a long list of Lebanese personalities prepared in cooperation with France, Britain and the US, which requested the participation of the EU and demanded that the sanctions are not solely imposed by the US Treasury Department and are not only related to combating terrorist financing.”

Lebanon’s central bank described the newspaper’s claims as “groundless fabrications,” and warned of legal action in response.

A financial and banking source told Arab News: “The governor of the central bank has no legal right to transfer any funds abroad from the Banque du Liban. All transfers made through private commercial banks and all the operations of the Banque du Liban are fully monitored by the Central Council and the government commissioner at the Banque du Liban.”

The source said that when any central bank in the world makes any transfers abroad, “these are automatically under US surveillance.”

According to the source, “Lebanon usually receives requests from abroad to provide assistance based on the tax information exchange agreement.”

The source said: “I am not attempting to defend anyone. What was mentioned indicates that there is a political conflict, and what was published is part of the political war in Lebanon.”

Aoun and his team are calling for a forensic audit that covers the central bank, and parliament has approved a request to extend the audit to cover all state institutions.

The Banque du Liban is being blamed for the loss of Lebanese dollar deposits in private banks after it borrowed funds to finance Lebanese government policies.

Lebanon’s crippled banking system is at the heart of a financial crisis that erupted in late 2019. Banks have since blocked most transfers abroad and cut access to deposits, resulting in widespread anger as growing numbers of people face economic hardship.

Global markets rebound as rate hike worries fade

Global markets rebound as rate hike worries fade
Updated 02 March 2021

Global markets rebound as rate hike worries fade

Global markets rebound as rate hike worries fade
  • Wall Street stocks snapped higher at the open and kept pushing up further

LONDON: World stock markets shot higher on Monday, bouncing back from last week’s heavy selloff as worries about early interest rate hikes faded and US Treasury yields dropped, dealers said.

Wall Street stocks snapped higher at the open and kept pushing up further, recovering much of the ground they lost at the end of last week.

The blue-chip Dow was up 2.1 percent in late morning trading, with the broader S&P 500 and tech-heavy Nasdaq Composite also gaining more than 2 percent.

In Europe, London, Frankfurt and Paris all closed the day 1.6 percent higher.

Asian stocks rose strongly on bargain-buying as the passage of President Joe Biden’s $1.9-trillion Covid relief stimulus through the US House of Representatives provided additional cheer.

While many Democrats are disappointed a $15 minimum wage can’t be included in the package in the US Senate, “it does have the short term benefit of making the path to passing the American Rescue Plan that bit easier,” noted Spreadex analyst Connor Campbell.

Oil prices climbed before this week’s output meeting of the OPEC group of oil producers and their allies, while the dollar advanced versus the euro and yen.

“Equity markets have shaken off the negative sentiment that was doing the rounds last week as the pullback in government bond yields has seen buyers step into the fold,” said analyst David Madden at online trading firm CMC Markets UK.

Stocks took a beating last week as government bond yields spiked higher, with investors worried that too much stimulus will spark inflation and push central banks into raising interest rates earlier than expected.

In a bid to calm markets, several central banks — including in Japan, South Korea and the European Union — sought over the weekend to reiterate their pledges to maintain their ultra-loose monetary policies for as long as needed.

Australia’s led the way by ramping up its asset purchases to keep rates low.

“Traders feel more confident about snapping up relatively cheap stocks as they are less fearful that central banks will look to tighten their policy anytime soon,” said Madden.

News that Johnson & Johnson’s one-shot vaccine had been given the green light by US regulators — paving the way for a quicker rollout of vaccinations — added to the positive sentiment on Monday.

“Now that the US has three highly effective Covid vaccines, expectations for herd immunity at some point in the summer should release a lot of pent up buying power from the US consumer,” said Oanda analyst Edward Moya.

He said this is renewing interest in stocks in smaller companies with investors betting that an early drop in restrictions will boost their fortunes.

Oil prices also rebounded with focus on the key meeting of the OPEC+ group of major producers on Thursday, when they will discuss the huge output cuts that have provided much-needed support to prices.

Russia is said to be keen to turn on the taps again but Saudi Arabia prefers to keep the status quo.

ENGIE ramps up KSA expansion as energy embraces private sector

ENGIE ramps up KSA expansion as energy embraces private sector
Updated 02 March 2021

ENGIE ramps up KSA expansion as energy embraces private sector

ENGIE ramps up KSA expansion as energy embraces private sector
  • French conglomerate aims to more than double its workforce in the Kingdom to 5,000 by 2025

JEDDAH: ENGIE, the France-headquartered energy and services conglomerate, revealed earlier this year its plans to invest a further $6.34 billion in Saudi Arabia by 2025, adding to its existing assets and projects in the Kingdom valued at over $8 billion.

The new investments will cover a wide range of services, but the bulk of the $6.34 billion will be in new public-private partnerships (PPPs) focused on utility and social infrastructure projects, Turki Al-Shehri, ENGIE’s CEO in Saudi Arabia, explained to Arab News.

The firm aims to get involved in PPPs to establish new hospitals, universities, schools and railroads, while its focus on energy services will include renewable energy, energy efficiency, research and development (R&D), as well as advisory services.

The Saudi Ministry of Health recently released Al-Ansar Hospital in Madinah for private investment, as part of its Private Sector Participation Program (PSP). Al-Shehri noted that it is a project worth $300 million, with around 240 beds, and ENGIE is already bidding to build, operate, maintain, and provide medical equipment to the hospital for a period of 20 to 30 years.

Moreover, ENGIE was awarded the Yanbu-4 independent water producer desalination plant by the Saudi Water Partnership Company last year, projected to supply 450,000 cubic meters of desalinated seawater per day using clean energy. According to Al-Shehri, this project alone is valued at around $850 million.

“This is ENGIE’s second water project. The first was Marafiq power and water project,” said Al-Shehri. “We work with water desalination projects around the world, with Saudi being a major target for us.

“The Saudi Water Partnership company recently released a seven-year plan which will require three to four seawater desalination projects per year; bidding on such projects is part of our strategy,”
he added.

After operating in Saudi Arabia for 20 years, the conglomerate expanded its presence in the Kingdom in 2019 by establishing its holding company to bring all the group’s Saudi assets under one umbrella holding company.

Al-Shehri noted that the decision to establish the holding company was encouraged by the Kingdom’s Vision 2030. Announced in 2016, the 2030 plan focuses on increasing the private sector’s long-term contribution to the economy by opening up new opportunities and removing obstacles that are preventing the sector from playing a larger role in development.

“ENGIE’s bread and butter are PPP projects,” he said. “In the past, they were very selective, mainly within Saudi Aramco, Saudi Electricity Company, and Saudi water company … it was segregated and not a countrywide strategy. However, Vision 2030 has completely changed ENGIE’s objectives toward Saudi Arabia.”

There has been a continuous increase in awarding of PPP projects in utility infrastructure projects between 2017 and 2020, while social infrastructure projects have just recently been introduced,
he explained.

Al-Shehri said the holding company was a requirement to consolidate the exerted efforts and utilize existing resources with global know-how. The French company currently has 16 Saudi subsidiaries “and the number is growing” he said.

Restrictions as a result of the coronavirus disease (COVID-19) pandemic did not have too much impact, he added, and plans for ENGIE’s PPP projects have been moving smoothly.

“Since ENGIE operates in 70 countries globally, we were able to learn from countries that were infected prior to Saudi Arabia, and we were able to take measures ahead of time,” he said.

Instead, ENGIE has directly hired 62 additional employees and acquired Allied Maintenance Company (AMC) in 2020, which added another 1,300 employees to its workforce, bringing the total number of staff in the Kingdom to around 2,000.

The firm plans to expand its workforce in Saudi Arabia to reach over 5,000 employees by 2025 and Al-Shehri said ENGIE has a strong local focus.

“When it comes to local content, we are focusing on two aspects: Manpower as well as local supplies,” he said. “ENGIE wants to be, and will be, a leader when it comes to international companies ensuring that there is local content being used and proper knowledge transferred, and local partners.”

He noted that the company spends $130 million a year on local supplies for all its assets, which equates to 85 to 90 percent of supplies being sourced locally.

Renewable energy is a core sector for ENGIE and Saudi Arabia provides big opportunities. During the Future Investment Initiative forum in January, Prince Abdul Aziz bin Salman said that the Kingdom aims to produce 50 percent of its electricity from renewables by 2030. “When the government took on this initiative, the private sector immediately started to follow suit,” Al-Shehri said.

According to a news report by research firm Frost and Sullivan, the region is expected to expand its renewables capacity from solar and wind by 18 times by 2025. “This is a very fresh market and the opportunity for growth is tremendous,” he said.

“It is the largest market in the region … It will continue to grow, and I think we will continue to see changes in policy as a result of prices continuing to decrease and opportunities being open to the private sector and regulations being relaxed,” he added.

Bitcoin is at a ‘tipping point,’ Citi says

Bitcoin is at a ‘tipping point,’ Citi says
Updated 02 March 2021

Bitcoin is at a ‘tipping point,’ Citi says

Bitcoin is at a ‘tipping point,’ Citi says
  • With the recent embrace of the likes of Tesla Inc. and Mastercard Inc., Bitcoin could be at the start of a ‘massive transformation’ into the mainstream, Citi says

LONDON: Bitcoin rose nearly 6 percent on Monday as risk assets rallied after last week’s bond rout cooled, and Citi said the most popular cryptocurrency was at a “tipping point” and could become the preferred currency for international trade.

With the recent embrace of the likes of Tesla Inc. and Mastercard Inc., Bitcoin could be at the start of a “massive transformation” into the mainstream, Citi added.

Bitcoin, which has risen to $47,000 from $4,700 last March, could in the future become the preferred currency for international trade or face a “speculative implosion,” the investment bank said. It was up 5.7 percent at $47,834 on the Bitstamp exchange. Smaller rival ether rallied 7.5 percent to $1,525.

Bitcoin’s recent performance has come with the growing involvement of institutional investors in recent years, contrasting with its heavy retail investor focus for most of the past decade, Citi added.

If businesses and individuals gain access via digital wallets to planned central bank digital cash and so-called stablecoins, bitcoin’s global reach, traceability and potential for quick payments would see it “optimally positioned” to become the preferred currency for international trade, Citi said.

Bitcoin, designed as a payment tool, is little used for commerce in major economies, hampered by high volatility and relatively costly transactions. 

Still, it has over the past year gained traction in some emerging markets such as Nigeria.

Such a dramatic transformation for bitcoin to the de facto currency of world trade — a status currently held by the dollar — would depend on changes to its market to allow wider institutional participation and closer oversight by financial regulators, Citi said.

Still, shifts in the macro-economic environment may also make the demand for bitcoin less pressing, it added.

DIFC Courts sees 41% rise in cases during 2020

DIFC Courts sees 41% rise in cases during 2020
Updated 01 March 2021

DIFC Courts sees 41% rise in cases during 2020

DIFC Courts sees 41% rise in cases during 2020
  • The DIFC Courts’ Small Claims Tribunal (SCT) saw cases increase 47 percent to 466 cases in 2020

DUBAI: The Dubai International Financial Center (DIFC) Courts saw a 41 percent rise in the number of cases it handled last year, with its technology and construction sector recording a 233 percent surge in disputes, it was announced on Monday.

Established in 2004 and based on the English-language common law system, the courts’ jurisdiction was expanded in 2011 to include all businesses from all GCC countries and beyond.

The number of cases at the main Court of First Instance rose last year by 41 percent, while the total value of claims increased 72 percent to AED9.95 billion ($2.71 billion), with the average claim across cases amounting to AED86.3 million. The cases covered a wide range of sectors, including banking and finance, construction, and real estate.

The courts also reported a 50 percent increase in the number of opt-in cases last year, meaning claims where the contracts do not specify the DIFC Courts as the location for disputes but both parties have elected to use it in order to find a resolution.

Zaki Azmi, chief justice of the DIFC Courts, said: “Undoubtedly, 2020 was a year that tested the resilience of every government service, private-sector business, and individual. It was a year that forced everyone to re-shift focus; to reprioritize, and, to adapt to rapid changes.

“Given the extraordinary circumstances that have emerged, all core services of the DIFC Courts have been fully maintained, whilst remaining true to our core values and dedication of public service.”

The DIFC Courts’ Small Claims Tribunal (SCT) saw cases increase 47 percent to 466 cases in 2020. The majority (51 percent) of cases were related to breach of contract, followed by employment (25 percent), property and tenancy (16 percent), and banking and finance (8 percent). The total value of claims related to SCT cases amounted to AED55 million.

Earlier this year, the DIFC Courts launched a new court which will rule on commercial space-related disputes, it was revealed on Monday.

The Courts of Space initiative, in partnership with the Dubai Future Foundation, will see an international working group of public and private-sector experts tasked with exploring space-related legal issues linked to such disputes, and brainstorming possible outcomes.

Start-up of the Week: Dokkan Joze W Loze

Start-up of the Week: Dokkan Joze W Loze
Updated 01 March 2021

Start-up of the Week: Dokkan Joze W Loze

Start-up of the Week: Dokkan Joze W Loze
  • Joze W Loze offers two kinds of talbeenah; the regular, traditional recipe, or the “golden” talbeenah, flavored with turmeric

RIYADH: A new Jeddah-based start-up has customers going nutty for its candied goods.

Dokkan Joze W Loze, which translates as “The Walnut and Almond Shop,” has the perfect products for those looking for a sweet treat to snack on without the guilt of overindulgence.

Owner Wid Sami Fayez began selling her candied nut creations to friends and family about two years ago. As her products gained popularity, she decided to set up shop officially and begin selling to the public.

“Since most of my products are made with walnuts and almonds, I decided to name my shop after the two ingredients I use the most,” she told Arab News. “To imbue the name with the spirit of traditionalism, I added the word Dokkan.”

Fayez started out with her most popular product, candied pecans made with cinnamon. To this day it remains the shop’s best-seller, with candied almonds coming in a close second.

“We also started adding new products recently. For example, for those who don’t have a sweet tooth we offer savory almonds with rosemary, an ideal snack for those on a diet or trying to eat keto,” she said.

Fayez also offers seasonal treats and gift boxes during Ramadan, perfect as gifts for the holiday or to pass around to guests visiting during the holy month. Some of the shop’s seasonal products include dates, stuffed with her signature candied nuts, a pecan cake, and one of the most popular products, a traditional drink called “talbeenah.”

“A year ago, we started offering talbeenah in our shop to celebrate the Prophet’s sunnah. It is a porridge made from barley flour, formed by adding milk and honey to dried barley powder. We then add cinnamon and cardamom to it for extra flavor,” Fayez said.

“The Mother of the Believers, the Prophet’s wife Aisha, narrated that the Prophet recommended talbeenah as “a companion to the heart of the sick,” and noted that it has a variety of health benefits,” she said.

Joze W Loze offers two kinds of talbeenah; the regular, traditional recipe, or the “golden” talbeenah, flavored with turmeric and a delicate blend of other spices such as ginger, cloves, nutmeg and fennel.

“The health benefits of talbeenah are almost endless,” Fayez says of the drink. “In line with the words of the Prophet, it relieves depression and grief, is very good for the heart and the liver, is a natural diuretic, helps with high blood pressure, helps with a cough, contains anti-oxidants, and so much more.”

For customers outside of Jeddah, Fayez also sells talbeenah as a dry mix, to which customers can add their own milk and combine at home.

The shop’s products can be purchased from Instagram by messaging them directly at @dokkanjozewloze, as well as from Jeddah’s community retail space Amkana, @amkanaksa on Instagram.