21 - 27 February 2002
Issue No.574
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Al-Ahram Weekly Online 21 - 27 February 2002 Issue No.574 |
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On shaky ground
A closely guarded investigation of high-level corruption in Jordan has the former intelligence chief in its grip and the business community on edge, reports Al-Ahram Weekly's correspondent in Amman
Under a cloak of secrecy and a ban on media reporting, military prosecutors at the State Security Court this week began investigating a major corruption case involving several senior officials, including the former chief of the kingdom's powerful intelligence agency.
The young businessman at the centre of the scandal, Majd Sami Shamayleh, was allegedly advanced up to $160 million by banks -- even though he lacked adequate collateral -- on the strength of recommendations by senior Jordanian officials. Shamayleh's company, Global Business, is a high- tech marketing company that supplies highly sensitive computerised eavesdropping equipment, including phone-tapping mechanisms, hidden-camera security systems, cordless equipment and cable TV and satellite services. The four-year-old company also provided Web site design and hosting, Internet and networking solutions, as well as training and consulting services. Run by a staff of 80, Global Business maintained offices in the Gulf, Libya and Uzbekistan. The company was frozen by a court verdict last week.
At least five people have been detained and are being questioned in connection with the loans given to Shamayleh, who fled the country after the affair surfaced. Two of the fugitive's associates have been detained, sources said. In the stock market, the scandal depressed the stocks of several banks.
Among those being questioned or under investigation are some enormously high-profile figures, including former influential Intelligence Chief Samih Battikhi, who is a member of the Upper House of Parliament, and former Agriculture Minister Zuhair Zannouneh. Also ensnared by the scandal are Nabil Barakat, the chairman of the board at the Jordan Gulf Bank; Ali Al-Husari, the chairman of the Export and Finance Bank; and lawyer Nasser Masadeh. Three intelligence department employees who are facing internal departmental action investigations are also reportedly involved in the case.
Unnamed sources were quoted by the local press last month as saying that several banks had extended tens of millions of dollars in early January to businessmen who lacked adequate collateral or submitted fraudulent documents, some allegedly bearing forged signatures of senior government officials.
The military prosecutor has frozen the assets of 55 Jordan- based firms and individuals suspected of involvement in the case and imposed a travel ban. That the case is being dealt with by the State Security Court is an indication of how seriously the government is taking this issue. Alarm spread over claims that almost all banks held inadequate collateral for loans and often lent money on the strength of stocks -- a violation of Central Bank of Jordan (CBJ) regulations. The government, the CBJ and the banks themselves have all denied the reports and maintain that the country's banking system remains sound.
King Abdullah met Central Bank Governor Umayya Touqan on Sunday for a briefing on the steps the bank had taken to address the issue of the dubious applications for credit. Touqan assured Abdullah that the banking sector "is in good condition and that deposits are protected." Touqan also told reporters: "The financial dimensions of the Shamayleh case are being addressed in a way that will overcome its limited impact." He added that other aspects of the case were being investigated by the military judiciary and did not have a financial dimension.
Mifleh Aqel, the executive director of the Arab Bank in Jordan -- one of the largest in the region -- also reiterated the capability of the banking sector in Jordan to cover the loans in question. "The banks' liquidity is in excess of 4.5 billion dinars," he said.
Even if the banking sector survives unscathed by the scandal, the political fallout of the case will undoubtedly have significant ramifications, in terms of both foreign investment and the perceived credibility of key decision-makers. Analysts say that this scandal is still snowballing and more heads will roll before it comes to its final repose.
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