COVER COVER

A man for all seasons Over the course of 33 years, Sheikh Mohamed Bin Issa Al Jaber has created from scratch a $12bn empire, encompassing real estate development, oil and gas and agro-industries. But last year, a variety of forces made an unsuccessful attempt to topple his empire. In a rare interview, the founder of MBI International lifts the lid on his costly battles with some Arab regimes, and how through the biggest storm of his life, he has emerged stronger than ever.

By Anil Bhoyrul

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heikh Mohamed Al Jaber gets straight to the point. “One thing I learned over the years is that people never expect a businessman to actually be transparent and honest. They Sthink there must be something between the lines, something else going on. But then those people underestimate me. I won the battle. And I won because I had one weapon – the truth.” In truth, it’s really has been one hell of a battle. Just weeks before our meeting, the empire built by the founder of MBI International looked to be on the ropes and heading for the canvas. A UK High Court judge had frozen his $12bn worth of assets around the world, as the full force of a vicious court battle with 's Standard Bank took effect. The Saudi-born tycoon had spent 33 years building from scratch a conglomerate encompassing and resorts, oil and gas and agro-industries. It had made him the world’s second-richest Arab business- man, and along the way he had become a high-profile philanthropist, donating millions to promote good governance and anti-corruption, higher education, women’s rights, public-private partner- ships and interfaith dialogue. The smartest streets in London, Paris and Vienna each had one of Al Jaber’s trademark hotels. But by early November last year, the knives were being sharpened and the obituaries to his businesses were being drafted. As Standard Bank's $150m case against Al Jaber started, a global asset- freezing order resulted in parts of his JJW Hotels & Resorts chain being forced into administration. Just how long could his other entities, including the AJWA Group, Jadawel International and Continentoil, continue unscathed? Down, momentarily. But out? Think again. Although initially losing the case against Standard Bank, Al Jaber surprised everyone by suddenly announcing the case had now been settled, with the asset freeze his office in Vienna, but Al Jaber has lost to disappear.” On the Arab governments His recent battle with Standard Bank lifted. A staggering $1.5bn had been added none of his legendary charm and warmth. that have fallen: “They tried to mislead is now confined to the history books, to the MBI Group from shareholders funds, The handshake is firmer than ever, his will their own people claiming that they will mere details on a High Court judgment. and the Scotsman Group – forced “I still say it will be 2018 to succeed even greater, and talk of retire- make them the wealthiest nation. They Although the case only made the headlines into administration after the asset freeze for the market not to ment summarily dismissed. But most of all, thought they could carry on just giving in the past two months, he reveals that the – was being bought back with 100% equity. Al Jaber is doing what he does best: shoot- them numbers and hope, and deny them real battle has actually been going on for Another $100m is being pumped into that recover, but to start ing from the hip, firing from all cylinders, their right to freedom.” On the Arab Spring: several years. And it is not a mere dispute group, with more big deals on the cards in recovering. These markets and taking no prisoners. On his recent “It will carry on and might touch countries over payments due to a bank, along with the coming months. battles: “I had principles which upset a lot that people never thought it would reach.” the usual claims and counter claims. It is, Make no mistake, Sheikh Mohamed Al were built on illusions, not of people and a lot of governments.” On And on the future of the GCC property he says, something far bigger: during his Jaber is back, and back with a bang. The true economic figures” his enemies: “I was a witness to their bad market? “Wait till 2018 before it starts, and journey to the top, his many interests in cold winter winds maybe blowing outside history and in their eyes, the witness had I mean just starts, to recover.” other areas – notably speaking his mind

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“I was not part of the new business cartel that was markets in the countries of operation and developing from 2005...I was a witness to their bad expanding the export network. In The MBI domestic markets, production of history and in their eyes, the witness had to disappear” own-label supermarket products and Empire overseas brands made under license will increase. An expanded distribution network will permit even more exports to JJW HOTELS & RESORTS Europe, Africa and Asia.

 The Scotsman Hotel  Grand Hotel Wien

Since it was founded in the late 1980s, JADAWEL JJW Hotels has built a strong portfolio INTERNATIONAL of hotel brands from economy through to mid-range and luxury. Unlike many The Group has extensive experience in other hotel operators, all JJW hotels are developing major projects with wholly owned assets. The group has 27 governments and leading international hotels spread across , , the companies. UK, and . Working with governments and Today JJW is seeking to focus on international corporations, the Group's expansion of the luxury 5 star hotel current initiatives include the provision portfolio. In recent years, JJW has of residential cities - operated and acquired the highly sought after 'Grand maintained by Jadawel - and the Hotel Wien in Vienna, along with 'The development of substantial leisure Berners' in London and the 'Amarante resorts and a number of other projects Beau Manoir' in Paris. JJW is equally in various sectors around the Middle active in luxury hotel acquisitions in East. Current clients include the KSA, resort locations with prestigious hotels Boeing, Hughes, Raytheon and British joining the all suite hotel 'Amarante  Saif Gaddafi: Once heir to the leadership of Libya, now awaiting trial at the International Criminal Court.  The Arab Spring countries will see their economies bloom in the next decade, Al Jaber believes. Aerospace. Formosa Park' in the Algarve portfolio. The recent acquisition of The Scotsman on Arab politics, as well as giving financial Gaddafi saw me as a threat in philanthropy 1990s, Al Jaber has had a huge influence condemning Saif Gaddafi’s attempts to CONTINENTOIL Hotel Group is in line with the Group’s assistance to many causes he considers and in business – the two areas that he in promoting the leadership skills of young rebrand himself, and attacking the Libyan The company was incorporated in 1994 plans to build the portfolio at the luxury worthy – has cost him dear. In particular, wanted to be a champion of. And this is the Arabs at elite institutions in London. This regime’s donations being made to univer- to engage in business activities in the end of the hotel market. he lays the blame at the door of the former problem with many governments because quickly expanded to include programmes sities in the UK. He was hugely critical of oil and gas industry on the basis of a Gaddafi and Mubarak regimes in Libya and they want to eliminate a businessman who at elite institutions of higher education, the Gaddafi Foundation which tried to business model of asset management AJWA GROUP Egypt amongst others, with whom he has has international recognition and who including the American University of mirror the principles of his own MBI Al along the hydrocarbon value chain, FOR FOOD INDUSTRIES had long-running conflicts. speaks his mind.” Cairo, the American University of Beirut, Jaber Foundation, suggesting there was bundling package services and The Group operates throughout the “I kept to my principles which upset a As the founding patron of the London University College London, the London nothing philanthropic about its purpose. technology products through strategic Middle East and exports to Europe, Asia lot of people and a lot of governments. Yes, Middle East Institute at SOAS (School School of Economics (LSE), University of None of this, says Al Jaber, impressed alliances with world class services and and Africa. Twelve factories in Jeddah, there are governments who had an agenda. of Oriental and African Studies) in the Westminster and a host of other prominent the Gaddafi regime, which soon began a technology providers and construction Dammam, and Egypt produce They couldn’t differentiate between their universities in the UK and Europe. concerted campaign to destabilise him. companies. and distribute frozen foods, rice wealth and their public wealth. They saw When it came to the movers and shakers “Those people, they want to compete Continentoil’s mission “is to assist products, grains, vegetable oils and me as a threat to their existence. It is on “I had principles which in the UK academic world, there are reck- with anything they see. They want be the resource owners and operators with the ghee for shipment and export from the record that the old regime in Libya had upset a lot of people and a oned to be few more respected and influ- best politician, the best businessman, the optimization, development and Group operated ports at Yanbu, Jeddah, worked against me for the last eight years. ential figures than Al Jaber. Saif Gaddafi, best charity person….they even tried to monetization in each segment of the oil Dammam and Suez. They tried to compete with my businesses. lot of governments. They of course, was heavily pampered by the compete with me in the hotels business. and gas business.” AJWA continues to acquire new compa- They spent public money. They tried to be couldn't differentiate UK’s educational elite in the mid-2000s, I just don’t think the son of a president We work with our customers to improve nies and expand into market sectors with the best politicians and be the best in busi- between their wealth and and even received a doctorate from the should become jealous of a businessman. their managerial, entrepreneurial and high growth potential. Future strategies ness. It upset them to see a businessman LSE. All this prompted Al Jaber to write But that shows the weakness of their char- operational skills. are focused on developing both the home who was respected,” he says, adding:. “Saif public wealth” to the University of London – effectively acter,” he says.

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If that wasn’t enough, Al Jaber had in the past also taken aim at the Mubarak regime, criticising its 'talent' for mixing busi- ness with politics and its move towards a dynasty. There has clearly been no shortage of powerful enemies he has built over the years. “There were many times when I was very clearly criticising these powers and I was not part of the new business cartel that was developing from 2005. I was totally separate from them and all these cartels were fighting me. I was a witness to their bad history and in their eyes, the witness had to disappear. I was a threat to them. There is more to say on this subject, but that is for the future,” he says. As it turned out, it was the likes of Mubarak and Gaddafi that disappeared. Al Jaber’s legal issues were coincidentally resolved soon after, and his business is now stronger than ever. Though the war has been long and painful, Al Jaber says he was always confident he would survive. He says: “I have been in business for 33 years,  Former Egyptian leader Hosni Mubarak is now facing murder and corruption charges in a Cairo court. so I know there will always be difficulties, and you always learn from your experi- the causes of his conflicts – governments benefits in the long term. He explains: “The ence. What you have to learn is be very mixing business with politics – were also freedom can only increase the income of honest with people and yourself, be very the causes of the Arab Spring. “In 2005, those countries. Freedom makes people AD transparent - and sometimes being trans- many Arab countries thought that is the contribute more, the GDP of those coun- parent shows weakness to those who want way forward - let's create successful busi- tries in less than ten years will treble. to attack you. But in the end it will help you ness people and put them in government. Jobless numbers will fall even if the first to get through. I knew I would win in the But then the crash came in 2008 and every- three years are tough. But, long term, they end, and that I might not react to change one saw that there was no real wealth there will compete with countries like my principle in life – which is to continue for most people. It was just an illusion of and . The people will be the biggest page being honest even though it has a cost.” wealth,” he says. contribution to local economies and that’s As a veteran of doing battles with govern- However, he believes that Arab states where wealth is sustainable. It does not ments, Al Jaber is quick to suggest that that have seen revolutions will also see come from building a cartel of opportunis-

for the construction of the MBI Al Founder of MBI Al Jaber Chair Key philanthropic activities Jaber Lecture Theatre in UCL's new in Middle Eastern Studies and Institute for Cultural Heritage. Directorship of the London Middle East Institute MBI Al Jaber As founding patron of LMEI at Foundation Higher SOAS in 2000, a premier think Founder, Sole Patron and Education tank on the Middle East, MBI Al Chairman of the MBI Al Jaber Jaber endowed the MBI Al Jaber Foundation Founding Patron of the London Chair in Middle Eastern Studies The MBI Al Jaber Foundation Middle East Institute at SOAS and Directorship of LMEI at has granted in excess of 500 LMEI grew out of MBI Al Jaber’s SOAS. scholarships to promising recognition of the need for a centre students from the Middle East Building, named in recognition of for the study of the Middle East in Partner of MODUL University to study at elite universities. his generosity and support for order to promote understanding MBI Al Jaber is a founding the College. and counteract negative partner at MODUL University Benefactor of the MBI Al Jaber perceptions and to provide Vienna, and grants 35 scholar- Building, Corpus Christi, Oxford Benefactor of the MBI Al Jaber expertise and resources for ships to students from the In 2009 Corpus Christi Oxford Lecture Theatre, UCL academics, business and Middle East each year through inaugurated the MBI Al Jaber In 2007, an agreement was signed government, the media and NGOs. the Foundation.  28

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tic people trying to protect a regime.” As for “To solve a problem you before a recovery, and I still say that now.” the Arab Spring, he warns that it is far from He adds that he wouldn’t advise his own over and this year “might touch countries have to acknowledge there children to even think about investing in that people never thought it would reach.” is a problem. And you GCC property for now. “To solve a problem If Al Jaber has had his work cut out you have to acknowledge there is a prob- defending his business empire in the past have to bring the people lem. And you have to bring the people who year, it looks like he will be equally busy who instigated those instigated these problems to account,” says growing it in the next twelve months, with Al Jaber. The tycoon also warns that 2012 a string of big deals on the cards. But just problems to account” will be the year of inflation, which could be how good a time is this to invest? If anyone “out of control” in some countries. can call the state of the economy correctly, What is for certain is that 2012 is also he can. Back in February 2008, during our going to be an extremely active year for last meeting, he warned that the GCC was $12.75bn MBI International. Last month saw the heading for a major property crash. It was first big injection of cash into the company then that he first coined the phrase “illu- Value of Sheikh Mohamed Bin Issa Al with $1.5bn pumped in. Of this, $100m is sion of wealth”. Al Jaber’s comments were Jaber's personal wealth. already being channelled into the land- dismissed at the time as being way out of mark five-star Scotsman Hotel in Edin- touch. The so-called “experts” were queu- burgh; the boutique 42 The Calls in Leeds; ing up to accuse him of scaremongering, and the deluxe Hotel de la Trémoille in especially as the majority of his interests Paris. A big new deal is expected shortly in are in Europe rather than the Middle East. $250m Vienna where he already has three hotels, But he was soon proved right: Lehman MBI International's projected total debt and MBI is said to be scouring Europe for Brothers collapsed just seven months by the end of Q1 2012. new acquisitions. The group’s debt has later, and shortly after many GCC prop- been brought down from $1.5bn in 2008 erty markets went into freefall. In 2008, Al to less than $500m today, and MBI is fore- Jaber warned that not only would prop- countries in the Gulf have not felt it yet – it cast to half that figure by the end of the first erty markets collapse, but it would take a will be worse in two to three years time. quarter of this year. The $1.5bn cash injec- decade before the first signs of recovery. But they built their booms on speculation tion was the perfect answer to his many So does he now still suggest we must wait and third buyers outside their boundaries. detractors. But it begs the question, why until 2018 for a recovery? “I will still say it The market was built on people coming did he wait for so long to do it? “The right will be 2018 for the market not to recover, from outside their countries to create their time to do something big is when you can but to start recovering. These markets were market. If you think that way, then you make the biggest impact. I could have done built on illusions, not on true economic should double the size of London every it any time, but the best time to make your figures. The people who put the strategy five years…I say it again…They built entire move is when nobody expects you to.” forward put it for themselves to win in cities to create a market for an outsider. Over the past 33 years, Mohamed Al the short term, not for the people to win That market could never be sustained. So Jaber has proved time and again to be the in the long term,” he says, adding: “Some in 2008 I predicted it would take ten years master of doing the unexpected.

 26 Supporter of Nice University MBI Al Jaber’s commitment to UN Spokesperson for Global Support includes a scholarship furthering education in the region UNESCO Forums on Reinventing programme in support of includes the promotion of women’s UNESCO Special Envoy Government Francophone students from the rights. Acting in support of educational MBI Al Jaber was appointed UN Arab world. reform and UNESCO’s mission to Spokesperson for Global build peace, tolerance and Forums on Reinventing Supporter of the American democracy in the Middle East. Government in recognition of University in Cairo his dedication to governance Including support for the Kitab Fi Jarida and the promotion of public- Economic and Business History Kitâb fî Jarîda publishes and private partnership. Research Center (EBHRC) in distributes free literary books conjunction with Harvard periodically inserted inside University. newspapers across the Arab Interfaith and World. Intercultural Education Supporter of Effat University for Women, Jeddah Dialogue for Women Benefactor of new campus Public-Private Trialog “Person of the Year” Supporter of Dar Al Hekmah buildings and a scholarship Partnership Award 2008 Private College for Women programme. MBI Al Jaber was honoured for

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