Syrian tycoon Rami Makhlouf warns of trouble in regime’s own house

Fallen cousin of Bashar Al Assad says takeover of Syriatel will destroy the company and signals possible implosion of president’s core Alawite constituency

A man watches a Facebook video posted by Syrian businessman Rami Makhlouf in Damascus on May 11, 2020. AFP

Syrian tycoon Rami Makhlouf said in a new Facebook video on Sunday that the targeting of his main telecoms businesses will harm “his folks”, a reference to the core Alawite constituency of the regime of his cousin Bashar Al Assad.

Wearing a brown blazer over a black T-shirt, Mr Makhlouf said moves to take over Syriatel, the country’s largest private company, which he controls, would lead to the demise of the company, adding that he had refused demands by the authorities to cede control of the firm.

Mr Makhlouf’s videos over the past month have opened a rare window into the murky world of the business dealings and amassed fortunes of Syria's ruling inner circle, estimated in the billions of dollars.

“We have to try to bypass this stage with the minimum of possible damage,” Mr Makhlouf said. “God lends patience to our folks who are regrettably being damaged from the actions being taken.”

Mr Makhlouf said he received a call in the last few weeks from someone he did not identify, asking him to resign as chief executive officer of Syriatel. He replied that he "will not give up" the position because it would mean "letting the company down".

"During the war I did not abandon  my president, my country or my folks. You don't  know me if you think I would give up now, in these circumstances," he said.

The fallen tycoon's 17-minute video statement was laced with Alawite religious symbolism.

Mr Makhlouf presented himself as the champion of established businessmen in a good-versus-evil struggle with war profiteers, although his huge wealth owes to monopolies the regime granted him and his father and to his status as the de facto treasurer of the ruling family, as well as new enterprises he set up during the civil war.

Since the 2011 Mr Makhlouf also became a major player in the war economy. He used the money under his management to distribute compensation to Alawite families whose members died defending the regime. The civil war followed a regime crackdown on the initially peaceful revolt against five decades of Assad family rule.

The billionaire, whose rise since 2000 became synonymous with a more overt Alawite takeover over Syria's resources, also financed several militias tied with Iran and with Russia, as well Alawite clerics who had been neglected by Mr Al Assad.

Regional financiers and executives who had dealt or partnered with Mr Makhlouf said he appears to have become too influential for the liking of Mr Al Assad and his brother Maher Al Assad, who heads the army's elite Fourth Mechanised Division and has been expanding his business patronage network over the past decade.

No one knows the precise incident that triggered the schism in the triumvirate comprising the two Assads and Mr Makhlouf.

The three men make up the core of a family-based regime that ruled Syria with an iron fist for the last five decades. The Assads have survived two uprisings at the cost of mass killing and displacement, mostly of Syria's Sunni majority.

In a video at the beginning of this month, Mr Makhlouf said that the regime had begun arresting managers at his companies and criticised the Alawite-dominated security apparatus, in an escalation of the mafia-style rift within the Assad-Makhlouf partnership.

Mr Makhlouf said on Sunday that Syriatel employees were still incarcerated and he had not been able to get them, without giving details.

“This style will only lead to the destruction of the company,” he said, describing Syriatel as a revenue stream to the treasury and provider of 6,500 jobs.

The 50-year maternal cousin of Mr Al Assad said he had agreed to find way to pay what he described as unjust levies on Syriatel, adding that the authorities were pursuing even bigger chunks from the company's revenue, which he predicted would ruin its finances.

"This is called sabotage."

He said the the authorities recently demanded that Syriatel uses suppliers mandated by the government, which he refused because it would limit Syriatel's ability to secure the best prices.

Addressing the authorities, he said: "You cannot do this. If the people of the land do not hold you accountable then you will answer to the people of the heavens."

But financiers familiar with Syriatel's books said many of its suppliers were front companies offshore that were ultimately owned by Mr Makhlouf.