Lebanon's Prime Minister Najib Mikat proposed on Wednesday inviting central bank governor Riad Salameh to a Cabinet meeting. Reuters
Lebanon's Prime Minister Najib Mikat proposed on Wednesday inviting central bank governor Riad Salameh to a Cabinet meeting. Reuters
Lebanon's Prime Minister Najib Mikat proposed on Wednesday inviting central bank governor Riad Salameh to a Cabinet meeting. Reuters
Lebanon's Prime Minister Najib Mikat proposed on Wednesday inviting central bank governor Riad Salameh to a Cabinet meeting. Reuters

Lebanese prime minister proposes inviting central bank governor Salameh to Cabinet meeting


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In a show of support, Lebanese Prime Minister Najib Mikati on Wednesday proposed inviting embattled central bank governor Riad Salameh to a Cabinet meeting.

It followed "lots of discussion about the matter of the relationship with the banks," Information Minister Ziad Al Makary said.

It was an apparent reference to a standoff between Lebanese banks and members of the judiciary who have frozen the assets of seven lenders this month. Mr Salameh himself is facing charges of embezzlement and corruption – which he denies.

Banks went on strike earlier this week in protest over the judicial orders.

Lebanon's Central Bank Governor Riad Salameh. Reuters
Lebanon's Central Bank Governor Riad Salameh. Reuters

No date had been set for Mr Salameh to attend a cabinet meeting, Reuters reported, citing Mr Makary.

The move would be a show of support after Mr Salameh who was charged with illicit enrichment. Mr Salameh has denied the charge brought against him by a Lebanese judge on Monday.

It was the first charge to be brought against the governor, whose wealth is also being probed by authorities in at least five European countries.

Denying the charge, Mr Salameh said he had ordered an audit, which showed public funds were not a source of his wealth.

His tenure has faced increased scrutiny since the financial system imploded in 2019, the most destabilising crisis since Lebanon’s 1975-90 civil war.

Judge Ghada Aoun charged Mr Salameh in absentia.

  • A crowded petrol station on the main road that links Beirut to south Lebanon. AP
    A crowded petrol station on the main road that links Beirut to south Lebanon. AP
  • Drivers come from every direction to fill their tanks with fuel. AP
    Drivers come from every direction to fill their tanks with fuel. AP
  • Chronic fuel shortages have plagued the country in recent months, with long queues at petrol stations a common sight. AP
    Chronic fuel shortages have plagued the country in recent months, with long queues at petrol stations a common sight. AP
  • Last month, central bank governor Riad Salameh announced that fuel imports would no longer be subsidised. AP
    Last month, central bank governor Riad Salameh announced that fuel imports would no longer be subsidised. AP
  • Worshippers listen as cleric Ali Al Hussein delivers a sermon during Friday prayers at a fuel station to protest against the severe shortages. AP
    Worshippers listen as cleric Ali Al Hussein delivers a sermon during Friday prayers at a fuel station to protest against the severe shortages. AP
  • People listen to Al Hussein's sermon in the coastal town of Jiyeh, south of Beirut. AP
    People listen to Al Hussein's sermon in the coastal town of Jiyeh, south of Beirut. AP

Last week, judge Aoun charged Riad's brother, Raja Salameh, in the same case and ordered his arrest. He has since been detained.

Mr Raja Salameh’s lawyer has said allegations of illicit enrichment and money laundering against his client were unfounded.

Mr Riad Salameh faces other investigations, including a Swiss inquiry over alleged aggravated money laundering at the central bank involving $300 million in gains by a company owned by his brother.

Judge Aoun's critics accuse her of acting in line with the political agenda of President Michel Aoun, who appointed her as a prosecutor and whose Free Patriotic Movement wants Mr Riad Salameh removed from his post.

Judge Aoun says she is applying the law.

Mr Riad Salameh has described accusations against him as politically motivated.

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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Updated: March 24, 2022, 10:43 AM