Kashoggi Quietly Buys 33% of Self-Help Video Marketer (Correct)
Van Nuys, California, Jan. 5 (Bloomberg) -- Saudi financier and arms merchant Adnan Kashoggi last year amassed a 33 percent stake in GenesisIntermedia.com, which sells videos that provide advice on love, diet and personal finance, according to a Securities and Exchange Commission filing.
Ultimate Holdings Ltd., of Bermuda, an investment company run by Kashoggi, said in an SEC filing that it owns 2,138,634 Genesis shares. The purchases were made beginning in February, though Kashoggi's name wasn't included in previous filings.
Kashoggi, a 65-year-old Saudi citizen, is president of Ultimate, which has also lent $30.9 million to the marketer of self-help videos since November 1999, according to an SEC filing Genesis made in November. Genesis lost $16.7 million in the first three quarters of 2000. Its shares gained 195 percent last year.
Ramy El-Batrawi, chief executive of Genesis, said he has known Kashoggi for about 15 years and worked with him ``on deals'' between 1988 and 1993. He said the two speak ``almost every day,'' and Kashoggi has visited the company's office.
Kashoggi wasn't immediately available for comment.
El-Batrawi he was surprised that Kashoggi's name was on the SEC filing. ``It's strange that it came out,'' said El-Batrawi, who owns 45 percent of Genesis in a telephone interview. ''He wanted a low profile.''
New acquisition
El-Batrawi said Kashoggi supports a $49.1 million proposed acquisition unveiled last week to buy Fashionmall.com, which sells apparel and beauty products over the Internet. ``He likes the play,'' said El-Batrawi.
Genesis offered to pay $2 in cash and 0.29 shares for each share of Fashionmall.com, or about $7 a share. Genesis said it has already purchased a 7 percent stake in the New York-based online clothing retailer. Fashionmall.com had $27 million of cash on Sept. 30, or about $3.60 a share.
Ultimate's first purchase of Genesis was 1,600 shares for $16.50 a share on Feb. 24. The next day, Genesis soared 70 percent after Courtney Smith, president of Courtney Smith & Co. of New York, recommended it on CNBC television.
Smith, who wasn't immediately available for comment, repeated his recommendation in four more television appearances in March, June, July and December on the CNN and CNN-FN networks.
Genesis also operates kiosks providing free Internet access in more than 20 shopping malls. Genesis lost $2.90 per share on sales of $32.2 million for the first nine months of 2000. Its net worth on Sept. 30 was $4.7 million. The market value of its 6.5 million shares is more than $110 million.
Genesis fell 0.1250 to $17.0625 Friday. The company had 6.5 million shares outstanding as of Nov. 14.
A Saudi Address
Kashoggi's principal occupation was listed as ``director and president'' of Ultimate in its amended 13-D filed Wednesday. The document said his principal office was at Alnasar Trading Industries, in Saudi Arabia.
Kashoggi, whose name is sometimes spelled Khashoggi, is wanted by police in Thailand on suspicion of loan fraud in connection with the collapse of the Bangkok Bank of Commerce in May 1996, according to the Economic Crime Division of that nation's police.
U.S. securities laws didn't require the disclosure of Kashoggi's involvement with Genesis, said Alan Bromberg, law professor at Southern Methodist University.
``That's a piece of information investors would be interested in knowing, but there's no express disclosure requirement,'' he said.
Jan/08/2001 14:43 ET
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