Amwal Invest's troubled past ends with financial settlements

01 July 2015
AMMAN -- After heated discussions lasting about seven hours, Amwal Invest's general assembly of shareholders ratified three settlements and reconciliation agreements with several adversaries.

Chairman Qasem Newashi last week told the Jordan Securities Commission in a disclosure that shareholders in possession of 13,569,492 million shares voted in favour and others holding 7,678,694 shares voted against.

The ordinary general assembly meeting on June 6, 2015 was attended by six out of the seven board members and 87 shareholders, out of 7,954, who carried 22.5 million shares representing 49.9 per cent of the JD45 million capital.

Because the meeting was the second, after a previous one was postponed due to lack of quorum, it was considered legal with those present and the decisions binding to all shareholders after the company followed the necessary procedures required to hold the meetings in both times.

"The general assembly decided in a majority vote to approve all the articles of the settlement agreements as tabled and formulated between the board of directors and the parties mentioned hereunder..." according to the minutes of the meeting.

The disclosure listed the following three settlements and reconciliation agreements that were ratified by the shareholders.

First: The case, labeled Al Ahlia Company Shares Agreement, under number 56/2012 at the Anti-Corruption Commission, between the company on the one hand and, on the other, Fayez Faouri, Mutassem Fayez Faouri, Muntasser Fayez Faouri, Muayyad Fayez Faouri, and the Faouri Group Company.

Second: The case, labelled Amwal Invest Company Agreement, under number 1479/2012 at the Amman Criminal Court, between the company on the one hand and, on the other, Fayez Faouri, Mutassem Fayez Faouri, Muntasser Fayez Faouri, Muayyad Fayez Faouri, and the Faouri Group Company.

Third: The case, under number 1479/2012 at the Amman Criminal Court, between the company on the one hand and, on the other, Ousama Mohammed Khatir, Tareq Mohammed Khatir, Modern International Company for Shares, Bonds and Securities, Nabil Samir Makahleh and Zakaria Mohammed Musleh.

Under the first settlement and reconciliation agreement, Jordan Invest and its 19 subsidiaries agreed to relinquish around 9 million shares, or 23 per cent of the equity, they possess in the Ahlia Projects Company to the other party which is interested in turning Ahlia and into a limited liability entity owned by it (Faouri (s)).

In exchange, the Faouri(s) undertook to settle Jordan Invest's debts and other obligations to financial brokerages, initially estimated at around JD11.6 million, and any extra amount that may arise.

An appendix lists the 15 brokerage companies, engaged in share and bond trading at the Amman Stock Exchange, and gives a breakdown of the JD12.9 million owed by Jordan Invest and its subsidiaries to each of these entities.

A number of brokerages have a lien on all 9 million shares of Ahlia Projects, a company that owns the Ahlia Plaza superstore.

Responding to a shareholder's question, the chairman revealed that the amount lost as a result of speculation on the share of Ahlia Projects was about JD18.5 million based on a report by a committee of experts.

This settlement also covers a reconciliation between Awtad for Diversified Investments, a subsidiary of Amwal Invest, and the Faouri(s).

Under the second settlement and reconciliation agreement, Fayez Faouri agreed to repay the obligations and indebtedness of Amwal Invest towards the Housing Bank, Union Bank and Jordan Commercial Bank. The amount is initially estimated at JD12.2 million.

He is also to pay Amwal Invest JD7.75 million.

In lieu of closing all obligations and dues of Mutassem Fayez Faouri towards Amwal Invest and its subsidiaries, and cancelling all cheques issued by Mutassem in favour of these entities, the Faouri(s) agreed to give up any rights, claims or entitlements they hold in Amwal Invest.

Moreover, Fayez Faouri agreed to pay JD1.8 million to Sura for Development and Investment Company in order to cancel a deal related to shares of Awtad for Diversified Investments and involving Amwal Invest.

Under the third settlement and reconciliation agreement, Ousama Mohammed Khatir agreed to pay JD5.7 million to Jordan Ahli Bank to settle dues and obligations demanded from Amwal Invest. He also agreed to pay JD200,000 to Amwal Invest to cover various costs and expenses.

The three accords entail dropping all lawsuits and prosecutions, and settling all legal disputes in order to allow the implementation of the deals.

Newashi answered several questions during the general assembly meeting telling the shareholders that the overall losses of Amwal Invest would be between JD60-61 million after the proposed modifications mentioned in the report of experts.

The chairman estimated the damage that befell Amwal Invest from the Faouri(s) and Khatir as well as others at approximately JD54 million based on the criminal lawsuit now in court, and around JD60 million based on the civil lawsuit.

Khader Hneiti, a member of the board and representative of the Social Security Investment Fund, said the violations resulted in JD62 million of losses, JD52 million of which were caused by Faouri who provided JD28 million of guarantees to the court.

Hneiti added that based on the terms of the settlement, "Faouri will pay us about JD22 million, of which JD15 million to banks and JD7 million real estate".

Noting that the Social Security Corporation wrote three times to the Companies Comptroller asking him not to liquidate the company, he indicated that the settlements were reached with the concerned parties after several months of negotiations and may or may not achieve the interests of the company.

Amid various arguments debating the advantages and disadvantages of the settlements, the chairman said that the board did not save any effort to collect as much as possible and has no capability to enter new negotiations.

The chairman and other members of the board were accused by some shareholders of destroying the company with settlements they considered weak.

Many shareholders lamented the loss of valuable real estate properties in Abdoun and Byader Wadi Al Seer to banks which put them to public auction.

"Honestly, are you satisfied with these settlements?" a shareholder asked the chairman.

Newashi replied: "Personally, as shareholder Qassem Newashi, and not as board chairman, I am not satisfied. I wanted and still want a better deal but we could not achieve better than this."

The following are subsidiaries of Amwal Invest:

Hazmieh for Diversified Investment

Raiat AlWatan for Administrative Investments

Alezddhar for Diversified Investment

Awtad for Diversified Investments

Rmowoz Alnanjah for Real Estate Investments

House money for Investment

Almyina for Diversified Investment

Third Sura for development of hotels

Kunoz Albhaar for investment

Amwal Brokerage and financial services

Almarom for Trade and Investment Company