The True Story Behind The Creation Of INVESTCORP
INVESTCORP – (03) The “Project”
Upon nomination by the government of Iraq, Dr. Jawad Hashim was elected founding president of the Arab Monetary Fund (AMF) for a renewable five-years term of office from May 1977 – May 1982.(3)
Article 4(d) of the AMF Treaty states that AMF will render “advice with regard to policies related to the investment of the financial resources of member States in foreign markets,… .”
Article 4(e), on the other hand, states that the AMF will undertake the task of “promoting the development of Arab financial markets.”
For the realization of the above goals, the AMF Treaty provided several means including the following:
Article 5(i): Conducting the research required to achieve the goals of the Fund.
Article 5(j): Providing technical assistance to banking and monetary institutions in member States.
Article 7: The Fund shall cooperate with similar Arab institutions to achieve its objectives; likewise, when necessary, it shall cooperate with similar international organizations.
Article 8 of the Treaty stipulates, in broad terms, that the AMF shall provide technical assistance and services in the financial and monetary spheres to member States. The above objectives inspired Dr. Hashim with the idea of creating an investment vehicle, unattached to any government agency, to provide financial service such as, but not limited to:
- investment management services for individuals, financial institutions and government agencies;
- provide consultancy, assistance, management, data processing or advisory services;
- provide investment and financial training.(4)
On an official visit to Abu Dhabi in early 1977 (in his capacity as Presidential Advisor) to deliver a letter from Saddam Hussein to the then President of United Arab Emirates, Dr. Hashim met Nemir Kirdar socially, at a dinner party. When Hashim assumed his post as President of AMF (HQ in Abu Dhabi), Nemir Kirdar, as the representative of Chase Manhattan Bank (stationed in Abu Dhabi), visited him a few times in Abu Dhabi. Hashim, Kirdar and their families also met socially several times. Dr. Hashim was impressed with Nemir’s personality, intelligence, courtesy and apparent ability in financial and banking matters. At their official meetings, Hashim and Kirdar discussed mainly the banking relationship between AMF and Chase Manhattan. Hashim also used to outline the objectives of the AMF in relation to the promotion of Arab capital markets and best ways of utilizing the financial surpluses of the Gulf region through a viable investment entity.
In the Summer of 1979, Dr. Hashim paid an official visit to Bahrain. During this visit, he met with Nemir Kirdar at Chase Manhattan Bank.(5)
On this occasion Dr. Hashim again discussed his “dream investment vehicle” with Mr. Kirdar, asking if he would join the AMF staff to undertake a detailed feasibility study on the matter. Kirdar declined, citing his full-time duties at Chase. Dr. Hashim then suggested that he was willing to approach the chairman of Chase Manhattan, David Rockefeller, to second Kirdar for a period of one-year. Again, Kirdar politely declined. Instead, he suggested that when his assignment in the Gulf came to an end, and before moving to another post with Chase, he might consider taking a long leave of absence to join the AMF on secondment basis from Chase Manhattan.
(See: Appendix-01, Paragraph 3, Mr. Kirdar’s Testimony)
As the chronology of events and the supporting documents (including Mr. Kirdar’s testimony) show, in July 1980 Mr. Kirdar joined the AMF’s staff as an advisor to its President Dr. Hashim on one-year secondment from Chase, with the following conditions to which Dr. Hashim agreed:
- His job title would be Advisor to the President of the AMF.
- His salary and other allowances would be similar to other advisors.
- He would be living in a small suite at Abu Dhabi Sheraton Hotel at the AMF’s expense.
- Travel expenses necessary for the study would be paid by the AMF.
- Dr. Hashim will secure a $1 million loan for him to buy a house in London.
- One full-time secretary.
- He would return to Chase Manhattan Bank after the end of his one-year secondment.
(See: Appendix-01, Paragraphs 7-10, Mr. Kirdar’s Testimony)
David Rockefeller and Jawad Hashim
(3) Since 1980, Dr. Hashim’s relationship with the government of Iraq (headed by Saddam Hussein) had deteriorated, and , hence, Hashim’s second term of office as President of AMF was not renewed.
(4) For details of the project’s objectives, see Appendix-10.
(5) By this time Mr. Kirdar was the regional officer in charge of all Chase’ activities in the Gulf. His head office was in Manama – the capital of Bahrain.