HE'S BACK. AND THE FUR IS FLYING ; A US marketing company linked to Adnan Khashoggi is under investigation
Attempts by arms dealer and international playboy Adnan Khashoggi to build a marketing company traded on the Nasdaq exchange have been dealt a serious blow by US regulators. The Securities and Exchange Commission (SEC) has launched a formal investigation into Genesisintermedia and trading in its shares, which are suspended on Nasdaq.
Investigators are also looking at transactions that Mr Khashoggi and others made in the shares of the company. Mr Khashoggi's life reads like a thriller novel. He has been connected with numerous arms scandals, he is well known for having a lavish lifestyle and was once brother-in-law to Mohamed Al Fayed, of Harrods' fame.
A spokesperson for the SEC said it never discusses its investigations. But Robert Bleckman, a vice-president of Genesisintermedia, confirmed that the SEC and Nasdaq are investigating share trading in the company.
Mr Khashoggi's trading in Genesisintermedia's shares has been frequent and unusual, through a Bermuda-based company, Ultim-
mate Holdings. Of interest is any role his shares played in the collapse of MJK Clearing, a Minneapolis-based share trading company.
The cause of the collapse was a stock-loan transaction between MJK and an American-owned bank called Native Nations. The shares involved are thought to be in Genesisintermedia, which is owned by Mr Khashoggi. But a spokesperson for Native Nations said that the details could not be confirmed.
"Nasdaq has sought information relating to certain transactions, including transactions involving Ultimate Holdings and Native Nations Securities," said Mr Bleckman. "Nasdaq is looking at information that would give them an answer about whether or not Remy El Batrawi [the firm's chief executive] had a possible role in these transactions. The SEC has commenced a formal investigation into certain matters relating to the company and trading in its securities."
Mr El-Batrawi has resigned. Mr Bleckman said he had done so to spend time helping investigators with their enquiries.
The company is involved in direct marketing and advertising. It also has a wide range of products: a video based on the book Men are from Mars, Women are from Venus; home decorating equipment; a piece of fitness equipment called the "Ab Twister"; and "Stimulure", which is a fish-bait that "emits a scent fish can't resist".
Shares were suspended at $5.90 (pounds 4), although they reached a high of $18.77 in June.
Mr Bleckman said the future of the company was not threatened. "We believe our financial position will enable us to continue with our business concerns."
The company has sacked around 60 employees, 15 per cent of its workforce. It has a $100m credit line from financier Carl Icahn's Riverdale, but the money can only be used for acquisitions.
Mr Khashoggi could not be contacted to discuss the investigations, but there is no suggestion that he has acted improperly.
(Copyright 2001 Independent Newspapers (UK) Limited) |
