The UN Special Representative for Iraq, Jeanine Hennis-Plasschaert, has called on authorities to recover $2.5 billion that was embezzled from the General Commission of Taxes in the latest corruption scandal to rock the country.
The case was revealed on Saturday by Oil Minister Ihsan Abdul Jabbar, who ordered an investigation when he was acting finance minister. Documents related to the investigation have been leaked to the media.
The internal investigation concluded that 3.7 trillion Iraqi dinars (about $2.5bn) was fraudulently paid to five companies by the commission.
The money was paid through 247 cheques between September 9, 2021, and August 11, 2022, from the commission's account at state-run Rafidain Bank.
At least three of the companies were established in July 2021, according to registration documents revealed when the case was leaked.
Trading companies and people who have dealings with the government are required to deposit a specific amount of money, from which taxes will be deducted later.
Afterwards, the companies and people can apply to withdraw what is left from their deposits.
“Retrieve these funds and return them to their rightful owners,” Ms Hennis-Plasschaert said on Twitter on Monday evening.
“Support the GoI [Government of Iraq] in its investigations. Protect those who uncover. Ensure accountability”.
She underlined that the war-ravaged country was in dire need of the funds.
“What can Iraq do with its missing billions USD? Invest in schools, hospitals, energy, water, roads, etc.,” she said.
No more details have been released from the Integrity Commission — the government body that investigates corruption — or the judiciary. Both have been carrying out their own probes.
The Supreme Judicial Council said a Baghdad court had been investigating the case since August and described those behind the case as an “organised network linked to influential figures”.
Arrest warrants have been issued against number of people and the court has heard evidence from some Finance Ministry employees, the council said.
It did not give more details apart from saying the investigation was still under way.
Accounts seized and arrest warrants issued
The General Commission of Taxes' general director appeared before the judge along with his deputy and senior officials on Tuesday, the Judiciary Council said in a statement.
Authorities have issued arrest warrants against the owners of the companies and seized their accounts, it added.
The country’s political rivals, who have spent the past year feuding over the formation of government, have accused each other of setting up the allegedly fake companies.
Iraq’s prime minister-designate Mohammed Shia Al Sudani vowed to make the fight against corruption a top priority for his government.
“We will never hesitate to take real measures to curb the corruption that has so brazenly spread in the joints of the state and its institutions,” Mr Shia Al Sudani tweeted on Sunday.
“We have put this file in the first priority of our programme and we will not allow the money of the Iraqis to be stolen, as has happened with the funds of the General Authority for Taxes in … Rafidain Bank.”
Corruption has been rife in Iraq since the 2003 US-led invasion that toppled Saddam Hussein. Many politicians have been arrested or removed from office for the practice.
Iraq is considered one of the most corrupt countries in the world. It was ranked 157th out of 180 nations on Transparency International’s 2021 corruption index.
The latest case is one of the biggest since 2003.
In 2005, authorities issued arrest warrants for former defence minister Hazim Al Shaalan and more than 10 officials in a massive fraud case involving more than $1 billion.
Investigators then believed the money, intended to purchase weapons, was siphoned abroad in cash, describing it as the greatest theft in history.
Mr Al Shaalan, who has since fled the country, denied the accusations.
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
How it works
A $10 hand-powered LED light and battery bank
Device is operated by hand cranking it at any time during the day or night
The charge is stored inside a battery
The ratio is that for every minute you crank, it provides 10 minutes light on the brightest mode
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
