Faris’ lease: A tale of two shareholders

It was the best of leases, it was the worst of leases. The Government’s lease of 3 Alexandra Place is unethical at best and illegal at worst. There is simply no other way to describe the three-year lease of that property to the Government by Zaman Enterprises Ltd (a company owned and/or controlled by the AG and/or his immediate family). The staggering $575,000 a month in rent – which equates to over $20,000,000 for the duration of the lease – is simply unconscionable. The lease was apparently approved by Cabinet Minute No 290 on February 14, 2019. Happy Valentine’s indeed.

A bit about Zaman Enterprises. The company appears to have been incorporated in 2006 by the AG. The incorporation documents show the AG and his wife, Mona Nahous, as the appointed directors. In that very year the corporation purchased the property at 3 Alexandra Place for $2,500,000 (about four month’s rent under the current lease). The corporation then issued two shares sometime between 2006 and 2007. The two shares were held by the AG (one share) and Mona Nahous (one share). To date, much of the discussion around the AG’s palpable conflict of interest has focussed on his directorship of Zaman Enterprises, little (if any) has been said about his 50 per cent ownership interest in the company.

In 2011 Al-Rawi was then removed as director of the company and his directorship was replaced by Nazem Nahous, the AG’s father-in-law. Despite that directorship change the AG’s shareholding interest (ie 50 per cent) remained unchanged. In 2013, Nazem Nahous was removed as director and replaced with the AG. Again, the AG’s shareholding interest remained the same.

In 2018, Abraham Faris Al-Rawi, the AG’s son, was appointed director of the company. Zaman Enterprises, for the first time, had three directors (all immediate family members). The shareholding interests in the company, however, remained unchanged. The AG owned 50 per cent of the issued shares and his wife owned 50 per cent of the issued shares.

Later in 2018, the AG was removed as director of Zaman Enterprises and only Mona Nahous and Abraham Al-Rawi remained as directors. Based on the information available to me, and subject to contrary information on the company’s annual return (due next month), there is no indication that the shareholding interests in the company had changed.

Indeed, the Note for Cabinet dated February 12, 2019 simply sets out the directors of Zaman Enterprises. It does not list the shareholders. A curious omission.

The available correspondence between Zaman Enterprises and the permanent secretary of the Ministry of Public Administration in 2018 shows letters by Nazem Nahous (corporate capacity unknown) and Mona Nahous (as director). Therefore, it is safe to say that at all material times the ownership interests, corporate interests and negotiations were held or undertaken by immediate family members of the AG. Assuming the shareholding interests to be unchanged, the AG also directly benefits from the purported lease arrangement.

The AG has attempted to distance himself from the transaction indicating that he recused himself at all material times. This is simply insufficient. Mere recusal for such a heavily conflicted transaction – a transaction approved by his immediate colleagues in Government – is unethical, if not illegal.

Sub-section 24 (1) (c) of the Integrity in Public Life Act (the Act) provides that “A person to whom this part applies shall ensure that he performs his functions and administers the public resources for which he is responsible in an effective and efficient manner and shall… arrange his private interests whether pecuniary or otherwise in such a manner as to maintain public confidence and trust in his integrity.” There is no way that the transaction and corporate ownership set out above inspires or maintains public confidence and trust. It does quite the opposite.

Sub-section 24 (2) (d) of the Act also provides that “A person to whom this part applies shall not… directly or indirectly use his office for private gain”. Again, given the corporate ownership set out above, it is clear that the AG directly and/or indirectly gains from the purported lease.

In the end, the purported lease to Zaman Enterprises Limited cannot stand. It is rife with conflicts and perhaps illegality. That previous governments may have entered such transactions is also no excuse. The “dey tief, so we tief too” mentality must stop. It is the only way for our tribal political system to get itself out of the gutter that both sides of the aisle have contributed to in recent years.