The True Story Behind The Creation Of INVESTCORP
INVESTCORP – (06) Soliciting Investors
To give credibility to the concept which the AMF developed, Hashim, in his capacity as President of the AMF, sought to solicit first the participation of institutional investors, mainly the national banks of each Gulf State. Beginning in November 1980, he first wrote to the Chairman of the Board of National Bank of Abu Dhabi (NBAD) Ahmed Khalifa Al-Suwaidi. Thus, by a letter dated November 29, 1980, Dr. Hashim requested Mr. Suwaidi to agree in principle to participate in the capital of the proposed investment company: INVESTCORP.
Similar letters were sent to the National Bank of Bahrain, Bank of Oman, The Dubai Bank, National Bank of Sharjah, Qatar National Bank and Commercial Bank of Qatar. Some of these letters were signed by Dr. Hashim while others were signed by Nemir Kirdar in his capacity as Advisor to the President of AMF. In all those letters, it was clearly indicated that the project was undertaken by the Arab Monetary Fund. For example, by a letter dated January 17, 1981, to the Chairman of National Bank of Bahrain, it was unambiguously stated that the AMF invites the said bank to contribute in the proposed investment company’s capital.
In soliciting investors, whether institutional or individuals, the AMF indicated emphatically and clearly that INVESTCORP was the AMF’s creation and upon which it had spent substantial sums of money in the form of salaries, accommodation, travel and legal expenses. INVESTCORP was not the creation of anybody other than the AMF. It was conceived pursuant to the interpretation of AMF’s Treaty by the then President of the Fund, Dr. Jawad Hashim.
By May 1981(6) the AMF “project” attracted many individuals and institutions to participate in the capital of the proposed company: INVESTCORP. Approximately US$55 million were committed by the participants. Institutional participants whom Dr. Hashim, as President of AMF, solicited included:
- National Bank of Bahrain
- Bank of Bahrain and Kuwait
- Commercial Bank of Kuwait
- Qatar National Bank
- Saudi-Cairo Bank
- Gulf Union Insurance Co.
The first individuals to participate in INVESTCORP’s capital were Dr. Hashim and few of his friends under an entity called Gulf International Investment Network (GINET) with 12% shareholdings. Others included wealthy businessmen from various Gulf States.
(6) Nemir Kirdar was still an employee of AMF.