The True Story Behind The Creation Of INVESTCORP
INVESTCORP – (08) Application for Incorporation & Founder Shareholders’ Meeting
Pursuant to the legal advice of the law firm of Hatim Zu’bi (which was retained and paid for by the AMF), on May 24, 1981, an application was made to Bahrain Ministry of Commerce and Agriculture for the incorporation of INVESTCORP as a Bahrain Exempt Company with authorized capital of US$100 million divided into 100,000,000 US$ dollar par value common shares. While the application was pending approval, the Founder Shareholders held their first meeting on August 12, 1981, at the Hilton Hotel, Manama, Bahrain. As Mr. Kirdar was going to leave the AMF on August 15, 1981, and resign from Chase Bank (on the premise that he will become INVESTCORP’s CEO), Dr. Hashim suggested that he (Nemir) should be designated as the “Project’s Coordinator.” stationed in Manama, Bahrain, which he duly was.
Below are relevant extracts from the Minutes of the meeting:
ARAB INVESTCORP INTERNATIONAL, E.C.
FOUNDER SHAREHOLDERS’ MEETING
Held at the Hilton Hotel, Manama, Bahrain at 10.a.m., Wednesday, August 12th, 1981.
MINUTES OF THE MEETING
The meeting was attended by 31 Founder Shareholders in person or by proxy, representing 93% of the subscribed shares of the proposed company. The meeting was also attended by Dr. Jawad Hashem, President of the Arab Monetary Fund; Mr. Hatim S. Zu’bi, Legal Adviser to the Founders and representative Mr. Ian Williams of Whinney Murray, Auditors acting as custodians…
…Dr. Jawad Hashem, President of the Arab Monetary Fund delivered a short speech emphasising the AMF dedication to support any venture in the financial field which would advance and upgrade the financial services and/or capabilities of the Arab world. Based on such conviction, the AMF welcomed this project and gave it unqualified support in its feasibility study and conceptual development period. …Dr. Hashem expressed his delight in seeing the concept change into a reality at the meeting. …He concluded by saying that the AMF is currently planning to pursue several other projects with similar significant financial market ramifications, both within the Gulf and other Arab countries. …
In relation to the background of Investcorp creation, Nemir Kirdar stated:
That the Arab Monetary Fund and its President, Dr. Jawad Hashem, had adopted its initial ideas and enabled him to research and prepare the feasibility studies and plan of action for the project and placed at his disposal effective facilities and expertise which have been invaluable for enabling him and those who worked with him to present a complete study and plan of action for implementation of the project. Mr. Kirdar expressed his thanks to the President and Members of the Arab Monetary Fund and considered this project as one of several Arab projects presently sponsored and promoted by the Fund.
Pursuant to the understanding between Mr. Kirdar and Dr. Hashim at their earlier meeting in the Summer of 1981, Mr. Kirdar left the AMF, resigned from Chase Manhattan Bank and assumed the post of Project’s Coordinator in Manama, Bahrain. As there were no budget to cover the project’s expenses from this point, Dr. Hashim advanced US$50,000 from his personal account as a short-term loan. The loan was paid back at a later stage from fees generated by INVESTCORP.
While in Bahrain, attending the Founders’ Shareholders Meeting, Dr. Hashim was informed that Bahrain Monetary Agency (Bahrain Central Bank) was somewhat hesitant to support INVESTCORP’s incorporation application. Thus, Dr. Hashim, in his official capacity, met with the Governor of the Monetary Agency to apprise him of the objectives of INVESTCORP and the AMF’s principal role in developing and embracing the project pursuant to the Fund’s Treaty. After that meeting with the Governor, Dr. Hashim suggested that Nemir Kirdar, as the project’s coordinator, should visit Bahrain Monetary Agency to provide any information the Governor requested.
Thus on August 15, 1981, Mr. Kirdar (together with legal advisor Hatim Zu’bi) met with the Governor as Dr. Hashim suggested. The meeting was followed by a letter dated August 22, 1981, from Mr. Kirdar (as the Project Coordinator) to the Governor of Bahrain Monetary Agency, outlining the objectives of INVESTCORP and its importance as one of Arab Monetary Fund’s projects.