Warka Assets Seized in ‘Subcarpet’ Fight

Winston Churchill once likened observing Soviet politics to “watching two dogs fighting under a carpet.” All you can say for sure is that something’s going on.

The latest news on Warka Bank has exactly this ‘subcarpet’ quality. The ISC has ordered Warka’s brokerage subsidiary to stop its operations in the market effective July 26 following the seizure of the bank’s equity in this company by the Ministry of Trade. (See the pdf file at the bottom of this link for the Arabic version of the announcement.)

The Ministry is also seizing shares held by the bank in nine other companies. Appended to the ISC’s announcement is a letter from the Ministry’s Office of Companies Registration to the Diyala Public Company for Electrical Industries dated July 11. This provides the following list:

1.) Al-Asyl for Horse Breeding and Marketing LLC / number of shares (1,020,000).
2.) Al-Iraqiyah for Bank Guarantees LLC / number of shares (400,000,000).
3.) Afaq al-Ghad for Trading Agencies and General Trade LLC / number of shares (200,000).
4.) Al-Mas for Security and General Protective Services LLC / number of shares (200,000).
5.) Al-Mas for Real Estate Investments LLC / number of shares (135,000,000).
6.) Warka Company for Mediation in Trading Securities LLC / number of shares (980,000,000).
7.) Dallat al-Jazeerah for General Transportation LLC / number of shares (680,000).
8.) Al-Ufuq al-‘Alamiyah for General Trading LLC / number of shares (1,340,000).
9.) Al-Mass for Recording of the Holy Book Verses LLC / number of shares (60,000,000).
10.) Al-Mas for Real Estate Investments LLC / number of shares (135,000,000)

Note that none of these are ISX listed companies. (6) is the brokerage.

Apparently, there must be a dispute between the bank and the Company for Electrical Industries to whom the Ministry’s letter is addressed. But there’s no way to tell what this dispute might be, why these ten names were selected, how they will be disposed of, or when the brokerage will be allowed to resume its operations.

It would be nice if someone could pull back the carpet and let us see what this fight is about.

13 Responses to Warka Assets Seized in ‘Subcarpet’ Fight

  1. Kickabuck August 11, 2011 at 4:01 pm #

    Mark, Arabic translations are often crude forms of English. Doesn’t it make more sense that this news ties in with previous articles regarding Warka Bank? Think about it. If a major Foreign Bank was buying into Warka, wouldn’t their due diligence protocol require an accurate assessment of value? Having these assets placed into the hands of a Trustee would place a fixed value on the basket of shares for 40 days. (per Warka’s selling mandate of proxy shares…number 6.) All others would be stable. I see a large foreign bank ready to buy, not a seizure of assets.

  2. max August 12, 2011 at 3:18 am #

    It is a bank that has not paid their employees since March 2011. The depositors are unable to get any of there money back as the bank is bankrupt. There is no deal for a western bank to buy Warka. All those illegally bought shares from the proxy program was never legit in the first place and only catered to unsuspecting westerners.

  3. DeWeaver August 12, 2011 at 5:18 am #

    Kickabuck: I know what you mean about Arabic to English translations. This particular one was done by a professional translator, however. I have complete confidence in their work. BTW, are you a client of the Warka brokerage? I’m wondering if they have stopped executing trades and, if so, what they are telling people who want to sell.

  4. Stew August 12, 2011 at 7:52 am #

    Sell?

  5. DeWeaver August 12, 2011 at 8:27 am #

    Can’t the brokerage clients normally sell their shares?

  6. Kickabuck August 12, 2011 at 10:33 am #

    Warka shareholders since 2009 have traded in their own names as they are registered with the ISX, prior to that they were proxy shareholders. Warka does have a delay when selling stocks, some transactions may take up to 30 days to execute. Stockholders in proxy can no longer buy shares, but they can sell. Those who trade in their own name can buy and sell. Warka pays great interest on their CD’s and wiring money out takes about 10-14 days. This article seems to reference the proxy shareholders.

  7. DeWeaver August 12, 2011 at 1:03 pm #

    Thank, Kickabuck. That’s interesting information.

  8. Max August 13, 2011 at 3:21 am #

    There is no one buying or selling with Warka and have not been in over a year. Proxy share holders are not able to do anything just as the same for other share holders no buying and no selling.

    Warka is in receivership and has been for two years…not paying anyone just ask all the contractors that have deposits in Warka and now can not there money back.

  9. DeWeaver August 13, 2011 at 11:55 am #

    Max: Sounds like the ISC’s suspension of the brokerage’s market operations will have no practical effect at all. Do you know if any of those contractors have sued to get their deposits back (like Asiacell did)? I’m wondering what options they have and what typically happens when they pursue them.

  10. Manny August 14, 2011 at 7:42 am #

    [Comment removed at poster’s request.]

  11. DeWeaver August 14, 2011 at 5:08 pm #

    Manny: If that is that case, what is the meaning of the ISC and Ministry of Trade announcements contained in the pdf at the botom of this link?

  12. Manny August 19, 2011 at 7:25 am #

    Source: Dar Al Hayat –

    «Warka» Iraq are preparing to merge with «Standard Chartered Bank»

    Friday, August 19, 2011
    BAGHDAD – Naseer Goldfinch

    Announced the «Bank« Warka »near the Iraqi Special integration with« Standard Chartered »British, at the request of the Iraqi Central Bank raising capital all private bank to 250 billion Iraqi dinars (200 million dollars) before the end of 2013.

    The Executive Director of «Warka» Mohammed al-Samarrai and the existence of an agreement for integration reached its final stages between the two banks, Iraqi and British, giving the first bank’s ability to finance major projects.

    He stressed that the integration of the bank with a giant foreign corporation will increase the confidence of customers and the government and the Central Bank of Iraq.

    The central bank called on the Iraqi private banks to merge with each other, to ensure the composition of large amounts of capital to facilitate the work of financial and enhance the confidence of the citizen.

    The source of the «Union of Iraqi banks» of «life» that «private banks refuse to integrate, as family banks, not financial institutions in the true sense.

    Every family wants to sit on the throne of a financial institution does not share the second family».

    The source explained that the first merger will be agreed between the four private banks, noting that «there is no solution to the integration of these banks only, as it is obliged to submit financial statement to the end of 2013 as the central bank raised its capital to 250 billion Iraqi dinars».

    And operating in Iraq six Arab and foreign banks are private «Arab Banking Corporation» Bahrain and «Turkish Agricultural Bank» (aprons) and «Bank Melli Iran» Lebanese banks and «Byblos» and «Intercontinental» and «Beirut and the Arab countries».

    The Iraqi financial institutions are seven state banks, five of which specialist cares for the industrial, commercial and housing, and 30 private banks, of which seven are Islamic.

    http://translate.google.com/translate?hl=en&prev=/search%3Fq%3Dhttp://www.nahrain.com/%26hl%3Den%26rls%3Dcom.microsoft:en-us:IE-SearchBox%26prmd%3Divns&rurl=translate.google.com& sl=ar&u=http://www.iraqdirectory.com/DisplayNewsAr.aspx%3Fid%3D16570

    &

    http://translate.google.com/translat…article/272519

  13. Kickabuck August 21, 2011 at 9:24 pm #

    Max doesn’t know what he’s talking about. I can buy and sell any stock that actively trading through Warka as I wish, they will be open for business tomorrow just like they were today, stop the rumors.

    Here’s more about Standard Chartered & Warka.

    Source:The National
    http://www.thenational.ae/business/m…e-bank-in-iraq

    Standard Chartered in talks to acquire private bank in Iraq
    Hadeel al Sayegh

    Aug 22, 2011

    Standard Chartered Bank has held talks with one of Iraq’s biggest private banks over its possible acquisition.

    Negotiations with Warka Bank are still in the early stages, according to a bank official. “It’s not final until it’s absolutely final,” he said. The lender has a network of 120 branches in Iraq.

    It comes as the country’s central bank calls on banks to increase the size of their capital to US$214 million (Dh786m) and submit financial statements before the end of 2013.

    The regulator wants to reduce the number of local lenders and attract foreign investment into the sector.

    A merger would “put the bank in a very strong position and give the ability to finance major projects”, said Mohammad Al Samerai, the executive director at Warka Bank in Baghdad.

    Standard Chartered Bank declined to comment yesterday.

    there is more in the link…