Pandora Papers Further Unveil Riad Salameh’s Hidden Wealth 

Alia Ibrahim
Founding partner and the Chairman of the Board of Directors “Daraj”
Published on 03.10.2021
Reading time: 8 minutes

The Pandora Papers come to increase the suspicions surrounding not only BDL’s governer, but the political system associated with him for more than three decades, which, despite all the suspicions surrounding him, seems to adhere to his remaining in office.

With every wedding, as the Lebanese proverb goes, Riad Salameh gets his cake. Following the Swiss leaks and Panama Papers, the Pandora Papers yet again shed more light on the network of companies the Governor of the Lebanese Central Bank (BDL) established in more than 20 years to help manage a fortune that likely runs in the hundreds of millions of dollars.

The latest set of documents to have emerged present two new companies. The first is AMANIOR, which is fully owned by Riad Salameh, who also holds the position of director. The second is Toscana owned by his son Nadi, whose name already appeared in the previous investigations Daraj published in cooperation with the Organized Crime and Corruption Reporting Project (OCCRP). 

The documents also shed more light on FORRY Associates Limited, which is owned by the BDL Governor’s brother Raja Salameh. FORRY became infamous following the Swiss investigation launched last January into the possible embezzlement and money laundering of some $300 million of BDL funds. 

The Pandora Papers, which contain enough detail to raise suspicions and further isolate the governor, have emerged at a complicated moment in time, as international prosecutions, especially in Switzerland and France, are competing with Lebanese efforts to secure immunity for Riad Salameh in order to protect him and with him the entire political and financial system he served for more than three decades.

The Star Governor

The BDL Governor has a special relation with fame. Having enjoyed over two decades of stardom lit up by a flurry of international banking awards, Riad Salameh in the past few years has become one of the most controversial and mysterious figures both in Lebanon and the world. 

The governor had been celebrated as the mastermind behind the “miracle” of stabilizing the value of the Lebanese pound, a period during which the Lebanese people enjoyed a prosperity that was not proportionate with the actual state of the country’s economy. This is now seen as being responsible for the ongoing collapse, which the World Bank called “one of the world’s most severe economic crises since the mid-19th century.”

Internationally, Salameh’s reputation is no less ambiguous today, as he may be the first ever central bank governor to face corruption charges in more than one country, while still being in his position –  a position he does not seem to be leaving any time soon.

Profession: BDL Governor

New information in the leaked Pandora documents reveal a company called AMANIOR, which was established by Salameh in 2007, some 14 years after he assumed office at the BDL. AMANIOR is not the first company in which Salameh’s name appears. The importance of this new information lies in the fact that the company is fully owned by Salameh, with him being the sole director. 

The documents regarding AMANIOR also state Salameh’s job as “governor of the Banque du Liban,” a title he refrained from using elsewhere, where he simply identified himself as “bank manager.”

When the International Consortium of Investigative Journalists (ICIJ) asked Salameh about AMANIOR, its role, and the reason for its establishment in the British Virgin Islands, he – through his lawyer Marwan Issa Al-Khoury –gave the response he has given every time he is asked about any issues related to his enormous wealth. 

He first did so in an interview with Lebanese broadcaster MTV on April 8, 2020, saying that, before becoming BDL Governor, he was: “a successful banker at Merrill Lynch” with a monthly salary of some $165,000, and a personal wealth of some “$23 million dollars.”

“My wealth is transparent, declared and documented,” he also said. “And there is no dispute over it, not even among my opponents, as it dates back to the period before I took office. And I have the freedom to invest my own wealth. I did this for 27 years. I assigned people I trust to manage and control my assets.”

Apart from the moral aspect regarding protecting his wealth in a tax haven, while being at least partly responsible for Lebanon’s financial collapse, in which the national currency lost 90 percent of its value and which impoverished over 80 percent of the Lebanese people, there is a legal aspect. 

Salameh being the sole director of AMANIOR is a sufficient justification for his dismissal as BDL Governor and even prosecution as he violated Article 20 of the Lebanese Code of Money and Credit, which explicitly states: “The Governor and sub-governors must dedicate themselves entirely to the Bank. Their functions are incompatible with any sort of legislative mandate, public function, activity in any enterprise, or other professional work, irrespective of whether such activity or work be remunerated or not.” 

Lawyer Nizar Saghieh, one of the founders of Legal Agenda, told Daraj that “the violation of Article 20 of the law is legally unambiguous” and sufficient to remove the governor from his post. Yet, he ruled out this would lead to a radical change in the current legal proceedings. Not in Lebanon at least.

According to Saghieh, and other legal experts, the suspicions that have surrounded Salameh in recent years are enough to prosecute him, which occurred in more than one case filed against him

However, Lebanon’s Court of Cassation contradicted all previous judicial decisions in a recent decision, and offered Salameh absolute immunity. This meant that the exclusive right to sue the BDL Governor, is now in the hand of … the BDL Governor. In other words, any prosecution of Riad Salameh in Lebanon requires his permission.

“What is happening at the judicial level is as absurd as it is dangerous because it offers the governor all possible immunities to avoid prosecution, and even accountability,” said Saghieh.

According to Sabine El-Kik Professor of Banking Law at the Lebanese University and CEO of Juriscale, the Court of Cassation, which relied on a literal and simplified interpretation of the Code of Money and Credit, made a “grave mistake” that requires the intervention of the supreme court, because the interpretation adopted by the court of cassation, contradicts all legal principles. 

“What is happening is a legal heresy,” said Kik, who considered Salameh’s mere presence in office, despite the many suspicions of corruption surrounding him, as contrary to all legal principles. 

“There is a criminal audit taking place at the Central Bank, which means there are suspicions financial crimes have been committed,” she said. “Yet, no one investigates such crimes while keeping the main person concerned in his position.”

There is a certain conviction among Lebanese bankers, jurists and politicians that providing Salameh full immunity  is a foregone conclusion, and that his appointment in the Lebanese committee negotiating with the World Bank is only a natural prelude to that. 

Adopting the immunities necessary to protect him from any prosecution is to protect the interests of the entire political system, which includes Salameh’s presumed opponents, as well as banks and high-net-worth individuals who have benefited from his policies over the past decades.

The Pandora Papers only confirmed this view.  

From FORRY to Solidere

Unlike AMANIOR, the name of FORRY Associates Limited in the Pandora documents is not new. It is the company that featured in the official request for assistance sent by the Swiss public prosecutor to the Lebanese authorities, in which Riad Salameh and his brother stand accused of transferring over $300 million worth (commissions paid by the BDL for the sale of Eurobonds between 2002 and 2014) for the benefit of FORRY. 

According to the leaked Pandora documents, the company’s dissolution started on April 14, 2016, only 11 days after the publication of the Panama Papers. The firm officially closed its doors on May 16 of the same year.

Riad Salameh, in more than one interview, did not deny his relationship with FORRY, nor did he deny the transfers, yet reiterated that every “dollar was spent with the approval of the Central Council of the Banque du Liban.”

So, once again, FORRY returns to the fore with numerous questions related to national and international developments.  After receiving the Swiss file, the Lebanese judiciary summoned both Riad and Raja Salameh to be investigated and matters came to a conclusion when the financial prosecutor in April confiscated computers and phones, and Raja Salameh’s office was sealed off with red tape. 

It is noteworthy that none of these suspicions, including accusations of money laundering and embezzlement of BDL funds, hampered Raja Salameh’s commercial activities in Beirut. 

Only in August he was re-elected as a member of the board of directors at Solidere, one of the companies that has benefited greatly from past BDL policies, as well as the current crisis.

Solidere was not the only one benefiting from the circulars issued by the BDL Governor. Among the other beneficiaries are Lebanon’s banks that through an unofficial “haircut” were able to reduce their debts in hard currency at the expense of depositors, who were forced to withdraw their money in the local currency at a value less than 30% of the original value.

As Solidere, so other companies and investors, which borrowed from banks before the crisis, repaid their debts at a much lower value. 

The company went on to achieve net profits of $20.7 million, compared to losses of $112 million in the previous year, while the value of its stock increased over 150 percent.

“Riad Salameh’s policies and the circulars he issued since the beginning of the crisis have increased the fortunes of everyone in the company,” said a banker who preferred not to be named. “So, who would object to his brother’s re-election?” 

Solidere replied to Daraj’s questions with an email from the Chairman’s office saying that: “According to the company’s Bylaws, it is Solidere’s shareholders who elect Board Members, and accordingly neither its board of Directors nor its management are involved in this process.”

Solidere also denied having any financial transactions or commercial relationship with the Lebanese Central Bank.

Toscana: A New Solidere?

The third company that appeared in the Pandora Papers, which is linked to Riad Salameh, is called ToscanaFounded by his son Nadi in 2013 it is registered in Roumieh, only a stone throw away from the Intra Investment Project, which has an estimated value of a billion dollars. 

The project, of which the BDL, as one of the biggest owners of the Intra Investment Company, is one of the biggest supporters, has been the subject of heated debate for years. The Ministry of Environment is against the project as it is set to kill off what remains of Lebanon’s forest wealth.

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An earlier version of this article stated that Solidere did not reply to Daraj’s questions (because of a delay in receiving its response).

Alia Ibrahim
Founding partner and the Chairman of the Board of Directors “Daraj”
Published on 03.10.2021
Reading time: 8 minutes

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