Iraq's judiciary has issued arrest warrants for four former government officials over the theft of $2.5 billion in public funds in one of the country's biggest corruption scandals.
An investigating judge in Baghdad issued the warrants on Saturday, the country's anti-corruption agency said.
The four men are accused of "facilitating the embezzlement of sums belonging to the tax authorities", it said.
The agency said the officials would also be subject to an asset freeze.
The four men, who include a former finance minister and staff of former Iraqi prime minister Mustafa Al Kadhimi, all live outside the country, an official at the agency told AFP.
The warrants do not name the accused, but the official identified them as former finance minister Ali Allawi, former director of cabinet Raed Jouhi, personal secretary Ahmed Najati and adviser Mushrik Abbas.
Mr Allawi resigned from his post in August last year. When the scandal broke a few months later, he denied involvement.
Mr Al Kadhimi has defended his record on fighting corruption, saying his government discovered the case, opened an investigation and took legal action.
The case, which has been called "the heist of the century", sparked outrage in Iraq, which is plagued by corruption.
At least 3.7 trillion Iraqi dinars ($2.5 billion) was stolen between September 2021 and August 2022 through 247 cheques cashed by five companies.
The money was withdrawn in cash. Most of the owners of the companies are on the run.
The cheques were issued by the General Commission of Taxes, an office within the Ministry of Finance.
Iraqi Prime Minister Mohammed Shia Al Sudani, who vowed to crack down on corruption after taking office in October, announced the recovery of 182.6 billion dinars a month later.
Standing besides large stacks of banknotes, he said two businessmen were arrested over the scandal.
All of the recovered funds were from businessman Nour Jassim, chief executive of Al Qanit and Al Mubdioon companies, Mr Al Sudani said.
Mr Jassim was arrested at Baghdad International Airport while trying to leave the country on a private jet.
He confessed to receiving more than $1 billion, Mr Al Sudani said.
Mr Jassim was released on bail on condition of recovering the remaining funds within two weeks, the Prime Minister said at the time.
Leaked details of an investigation into the scandal launched by Mr Al Kadhimi's government showed at least three of the companies accused of involvement were established in July 2021.
Trading companies and people who deal with the government have to deposit money as a performance guarantee, from which taxes are later deducted.
Afterwards, the companies and people can apply to withdraw what is left from their deposits.
“These amounts have been stolen by the companies through the cheques issued by the General Commission of Taxes instead of going to the real beneficiaries,” the investigation said.
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.”
