The True Story Behind The Creation Of INVESTCORP
INVESTCORP – (04) Nemir Kirdar at AMF (Arab Monetary Fund)
Once Mr. Kirdar assumed his job at the Fund, he was given a room next to Dr. Hashim’s, and the research work on the feasibility study began. Its title was:
ARAB MONETARY FUND PROJECT:
ESTABLISHMENT OF A PRIVATE INVESTMENT COMPANY
Hashim and Kirdar agreed that once the feasibility study was finalized, Dr. Hashim, in his capacity as President of the AMF, would begin soliciting the participation of banking institutions in the capital of the proposed company, regardless of the nature of ownership of those institutions: i.e., government, private or publicly owned. The solicitation would take the form of sending official letters on AMF stationary to those institutions. Further, Dr. Hashim would travel to meet the heads of these entities, high government officials and influential politicians. Kirdar, on the other hand, would solicit the participation of wealthy individuals and businessmen in the Gulf region. The ultimate aim of such an endeavor was to establish a viable and a unique investment vehicle with no connections to any government authority.
Loans to Nemir Kirdar
One month after joining the AMF, and in fulfillment of his promise to Mr. Kirdar, Dr. Hashim advanced SF 1,000,000 (one million Swiss Francs) loan to Mr. Kirdar. As he was personally unable to borrow such a large amount, Dr. Hashim borrowed the fund in his own name (and on his own risk) from First National Bank of Chicago (FNBC), Geneva branch, and advanced it to Mr. Kirdar. The loan was for three years maturing on August 5, 1983, with 6% interest. This loan was advanced to enable Mr. Kirdar to buy a house in London. As security to the loans, Mr. Kirdar provided Hashim with a Promissory Note.
To pay for his share subscription in INVESTCORP, Kirdar requested a second loan for US$600,000 from Dr. Hashim. On March 19, 1981, FNBC loaned Nemir Kirdar the above sum at a rate of 3/4 of a percent above the six months London Interbank offered-rate (Libor) and was payable every six months in arrears. This second loan was guaranteed by Dr. Hashim. During the period of Mr. Kirdar’s two loans from Dr. Hashim and/or his personal guarantee (from August 6, 1980, to August 19, 1983), a deposit account (number 820.368.6) was maintained in Mr. Kirdar’s name at FNBC-Geneva to facilitate the transfer of the proceeds of the two loans according to Kirdar’s instructions.
(See: Appendix-01, Paragraphs 10-13, Mr. Kirdar’s Testimony)