By Ahmed Elshamy
Cairo, Oct. 27, 2016 (MadaMasr) – The clock struck two in the afternoon when an employee at ‘HSBC Private Bank, Switzerland’concluded a phone conversation with a client. The employee proceeded to put down the following notes in the client’s file: “Date, 6 January 2005, the amount of $300,000 arrived at the client’s account. I contacted the client to discuss means to invest this money. The client informed me that she will be visiting Megève – a winter resort about 70 kilometers from Geneva where the bank branch is located – on 19 January 2005 and that she will call on the bank from Megève if her time permits.”
The client’s bank records state that the client is a “housewife” and an Egyptian national. The records also show a home address in Egypt and landline phone numbers in Egypt and Britain but no British address. The record also includes instructions from the client to keep all communication and bank records with the bank at its mentioned branch and not to mail them to the client’s address.
This client was no other than Naglaa Abdullah Al Ghazarley, wife of then tourism minister Ahmed Al Maghrabi. Al Maghrabi had taken the position of minister on 15 July 2004. Before that he was a board member of HSBC Egypt, a position he resigned from just two days before he became minister.
Naglaa Al Ghazarley had two secrete accounts in HSBC,in Switzerland with a total of $3,870,357 between the years 2006 and 2007, as revealed by what is known to the media as the ‘Swiss Leaks.’ The author of this investigative report obtained these leaked documents from the International Consortium of Investigative Journalists (ICIJ) through the Amman-based Arab Reporters for Investigative Journalism (ARIJ).
The secret bank accounts of the minister’s wife escaped the Egyptian authorities’ decision to freeze her accounts after the revolution of January 2011. She was also not among the wives of officials whose Swiss bank accounts were frozen by request from Egypt. This is how Naglaa Al Ghazarley escaped Switzerland’s decision to freeze the assets of her husband, former minister Al Maghrabi as well as other officials who were part of Egypt’s former regime and their wives.
The investigation documents how Naglaa Al Ghazarley was able to continue managing her assets and to start a company in Britain after 2011, despite the decision from Britain and the EU – with the exception of Switzerland – to freeze her and her husband’s assets. Al Ghazarley flew to London and started a company in Britain, after their assets were frozen, but she closed the company down when the Swiss Leaks emerged in 2015.
The leaks of ‘HSBC Private Bank, Switzerland’ known to the media as ‘Swiss Leaks’ included more than 60 thousand documents for over 100,000 clients in 211 countries at HSBC Bank branch in Switzerland. The documents disclosed that the bank aided some of its clients to hide their assets in secret accounts. Some of it was used for money laundering and tax evasion.
Egypt came as 20th on the Swiss Leaks list with more than 1400 accounts for over 700 clients with a total investment of $3.5 billion. Egypt’s Swiss Leaks list showed records of former ministers, businessmen and public figures including Ghazarley.
The Revolution Opens Corruption Files
After the revolution of Jan. 25, 2011, and in an attempt to calm things down, former president Hosni Mubarak decided to dismiss Ahmed Nazif’s government on 29 January 2011. But the protest continued.
Days later, on 3 February 2011, Egypt’s Public Prosecutor Abdul Majid Mahmoud issued orders banning the then removed housing minister Ahmad Al Maghrabi in addition to ministers of interior, trade and tourism and to freeze their and their spouses’ bank accounts on account of their suspected involvement in crimes of financial corruption, abusing public funds and profiteering. The Public Prosecutor’s order included seizing funds and assets belonging to Habib Al Adly, former interior minister, his wife Ilham Sharshar and his son Sharif. On the other hand, the decision to seize assets belonging to Al Maghrabi included only his personal assets and bank accounts without extending it to those of his wife Naglaa Al Ghazarley.
On 11 February 2011, hours after Mubarak stepped down, Switzerland announced that it is freezing assets including bank accounts and property estimated to be worth 410 million Swiss Francs or about $466 million at the time. The list of 12 names whose assets were to be frozen contained figures in Mubarak’s government including Al Maghrabi, Mubarak, his two sons Alaa and Jamal and their wives, Mubarak’s wife Suzanne Thabet, her brother Munir Thabet, HabibAdly, Rashid Mohammed Rashid, Zuhair Jurana and Ahmed Izz.
This list was updated on 16 February 2011 to include the names of Ilham Sharshar wife of former interior minister Habib Al Adly and their son Sharif. The list however overlooked Naglaa Al Ghazarley, wife of housing minister.
Swiss authorities did not disclose, back then, the value of frozen assets for each name on that list but the Swiss did ask Egyptian authorities to conduct fair investigations and trials to prove that the referred-to assets in Switzerland were obtained by illegal means or as a result of corruption in order for Switzerland to return those assets to Egypt. The freezing of assets ran for a renewable duration of three-years was to give Egyptian authorities sufficient time to present enough evidence to retrieve those funds.
Egyptian authorities put Ahmed Al Maghrabi and a number of government officials and ministers in detention on 17 February 2011 by orders of the Public Prosecutor who called for their detention for 15 days while under investigated for corruption, profiteering and squandering public funds.
On 22 February 2011, the Public Prosecutor issued eight new decisions to freeze personal accounts and assets of Ahmed Al Maghrabi and his wife Naglaa Abdullah Al Ghazarley while under investigations for financial corruption. Despite this, Egyptian authorities did not ask Swiss authorities to add both to the list of names whose assets should be frozen.
On 22 March 2011 the EU announced that it froze all assets in its possession including bank accounts, stocks, bonds, property and other assets belonging to a number of names on the list. In addition, the EU barred persons on that list from all economic exchanges and services such as starting a company or renting, buying or using services, deposits or merchandise.The list of 19 names included the housing minister and his wife. Britain announced on the same day that it too would freeze assets of names on that list.
On 26 April 2011,Egypt’s Illegal Gains Department barred Al Maghrabi and Al Ghazarley from traveling and from accessing or using their movable, immovable and cash assets while under investigation. Both were being investigated over accusations and reports from monetary bodies that the former minister had accumulated a large wealth that exceeds his legal income by abusing his public office first as tourism minister then as housing minister. The former minister signed a concession for the Illegal Gains Department to divulge confidential bank account details for himself and his wife in Egypt and abroad. The Department put Al Maghrabi under arrest for 15 days pending investigations.
The North Cairo Criminal Court ruled on 26 May 2011 that the former minister be charged with five years of hard labor after being convicted of profiteering and squandering public funds. Despite this judicial ruling and others against Al Maghrabias well as other ministers and officials, no actions were taken to retrieved assets from abroad.
Challenging Court Ruling to Freeze Funds
After Swiss authorities froze the assets and accounts of 12 figures in Mubarak’s former government including Al Maghrabi on 11 February 2011, they expanded the list of names twice: on 16 February to include 14 names then on 6 September 2012 to include 31 names.
The final list included many ministers and officials in Mubarak’s former government and their wives including Hussein Salem and his wife Nazema Abdul Hamid, AtefObed and his wife Najd Mohammed, Mohammed Ibrahim Sulayman and his wife Mona Salah Al Din among others. Swiss authorities announced that the value of the private assets and funds on that list amounts to about 700 million Swiss Francs, or nearly $714 million.
Although Swiss Leaks documents showed that Naglaa Al Ghazarley’s had secrete accounts in HSBC Private Bank, Switzerland, and that the EU and Britain did add her and her husband, the housing minister, to the list of frozen assets in March 2011, yet Swiss authorities did not include her in the most updated list of frozen assets in September 2012.
The documents we obtained of Al Ghazarley’s confidential accounts show financial transactions worth hundreds of thousands of dollars per transaction, despite the fact that her registered function in those bank documents state that she is a ‘housewife.’
Leaked documents also include notes from the bank employee about a phone conversation on 10 November 2005 stating that Al Ghazarley requested a transfer of $117,000, interest revenues of Al Ghazarley’s deposits in dollar and euro, on the same day those revenues were due on 15 December 2005. This was less than a month before her husband Ahmed Al Maghrabi moved from being the tourism minister to housing minister, a position he held in January/November 2006.
According to Egypt’s Law (62) of 1975 regarding illegal profiteering, the minister is obligated to present a statement of his financial status and those of his wife and minor children. The statement should include all fixed and movable assets including bank accounts in Egypt and abroad within two months from him taking office. The appointing of several businessmen as ministers in Nazif’s government raised a lot of criticism regarding suspicions aboutconflict of interest between their businesses and their position as civil servants.
Moreover, despite Naglaa Al Ghazarley’s name being included in Egypt’s list of assets to be frozen, and despite the issuance of legal orders preventing her from disposing in funds and economic transactions in Egypt, Britain and many other countries, Al Ghazarleystill managed to travel to Britain and start a private company in her name in November 2011.This was at the same time her husband, the former minister, was serving a strict imprisonment sentence for profiteering and abusing public funds.
According to documents posted on Britain’s official company registration website,‘Essential Designs by Nejla Limited’ was registered on 1 November 2011 to its sole owner Naglaa Al Ghazarley, an Egyptian national living in Britain.
The company is located at “Astell street, London, sw3 3rt, 5” in the borough of Kensington and Chelsea, one of the wealthiest areas in London. We looked up the address of the company and it shows that the building is not a commercial address but Al Ghazarley place of residence. It is registered to Sharif Amin Abdul Maksoud Al Maghrabi, her brother in law who was not on the list of persons whose assets were to be frozen.
It also appears that the British landline phone number on Al Ghazarley’sHSBC secrete account records in Switzerland belongs to the same address.
On 17 March,Naglaa Al Ghazarley liquidated and closed her company a month after the Swiss Leaks appeared and revealed the secrete accounts of clients at ‘HSBC Private Bank, Switzerland’ in February 2015.
Al Maghrabi’s counter measures to retract funds
Egyptian authorities were moving in a slow pace towards “returning smuggled funds” by forming committees whose members roam around foreign countries searching for ways to restore frozen funds and assets abroad. They made no noteworthy progress. In the meantime, Ahmed Al Maghrabi and his wife were making significant progress on two tracks: first by hiring a team of foreign lawyers whose job is to raise counter lawsuits against decisions to freeze their assets on the basis that Egyptian authorities failed to provide any incriminating evidence; and second by making efforts in Egypt to overrule court decisions and to request a retrial in preparation for an acquittal.
But the British court rejected the appeal to lift the freeze off assets in March 2012. Then in June 2013 the EU rejected Al Maghrabi and his wife’s lawsuit to lift the freeze and release their assets.
A court ruling in Switzerland decided on May 2012, that the Mubarak regime had acquired the legal description of ‘an entity practicing organized crime.’ This allowed Swiss authorities to apply the concept of ‘reverse logic to prove a crime’ which means that all frozen assets and funds are considered to be obtained by illegal means thus it is up to owners of those funds to prove that funds came from legitimate sources. This step came as a means to facilitate Egypt’s access to its emblazed funds abroad and give Egyptian authorities more time to conduct its investigations and trials.
The EU rejected the appeal from Al Maghrabi and his wife to unfreeze their assets June 2013.
As for their efforts inside Egypt, the court accepted the request to overrule the court’s former decision on the case of profiteering and squandering public funds (which Al Maghrabi was sentenced to five years of strict imprisonment in May 2011). The court also accepted the appeal for a retrial in a number of cases of profiteering and squandering public funds.
Over the course of 2015, the Egyptian Court of Cassation issued a final judgment acquitting Al Maghrabi in a number of profiteering and squandering public funds cases including the one to which he was sentenced to five years of strict imprisonment. But on 3 November 2015 the Court of Cassation accepted the Public Prosecutor’s appeal to challenge the acquittal of Ahmed Al Maghrabi on the basis that he was the tourism minister and that he and others were to be charged with the profiteering and abusing public funds in the case known to the media as “the Royal Company land case.” The court decided on a retrial with a new prosecuting circuit.
Despite this, Swiss authorities issued a decree in May 2016 to continue to freeze assets belonging to figures in Mubarak’s government on the list. This decision entered into force on 1 July 2016 and applies until February 2017.
On 30 August 2016, and after Swiss authorities extended their freeze of assets, the national commission to return assets and funds smuggled abroad, headed by Public Prosecutor Counselor Nabil Sadek, announced in a statement that it decided to form a small technical committee of public prosecutors and members of judicial and monetary bodies in order to prepare a comprehensive file on corruption cases against former president Mubarak, members of his family, and leading figures in his administration. This was done in preparation to hand a new file to Swiss authorities in an effort to retrieve those funds.
The committee for financial integrity estimates that the cash flow of illegally obtained funds smuggled out of Egypt between 2004 and 2013 reached $39.8 million. Of those $13.8 million were smuggled between 2011 and 2013.
Questions were sent to Ahmed Al Maghrabi and his wife Naglaa Al Ghazarleyvia DHL to the home address list on Al Ghazarley bank details on Swiss Leaks along with writer’s contact details in order to give them the right to comment on this article, with a deadline of 30 September 2016. According to DHL, the documents were received on 21 September 2016. We did not get a reply from them by date of publication.
This investigation was completed with the support of Arab Reporters for Investigative Journalism (ARIJ) -www.arij.net