ABL president's Cypriot assets increased significantly during the crisis: Investigation

Cyprus-based Sfeir Bancorp Limited, founded in 2011 by Selim Sfeir, president of the Association of Banks in Lebanon (ABL) and a minority shareholder in Bank of Beirut (4.68 percent), of which Sfeir is CEO, reportedly saw its assets increase by almost 21 percent between the end of 2019 and the end of 2020.

The finding is included in the "Cyprus Confidential" investigation by the International Consortium of Investigative Journalists (ICIJ) — which includes more than 250 journalists from 69 media outlets in 55 countries — into the use of the European island as a financial haven by international businessmen and politicians.

According to the Lebanese media outlet Daraj, which published the article, the documents included in the investigation reveal that the rise in Sfeir's assets began in 2016 — the year in which Lebanon's then central bank governor, Riad Salameh, set up the financial engineering mechanism that would eventually bring the country's banking system to its knees — but "increased considerably" after the onset of the economic and financial crisis in Lebanon at the end of August 2019. As a result, the ABL chairman's Cypriot assets are said to have risen "from $37.2 million to $45.5 million in 2019 alone, and up to $55 million by the end of 2020."

The documents consulted by Daraj also reveal that in April 2019, Sfeir allegedly sold "on behalf of Bank of Beirut 500,000 shares" for a total value of $8 million to … Selim Sfeir, in his capacity as director of Sfeir Bancorp Limited," of which he is also said to be the sole shareholder.

At the end of 2020, the Cypriot company was indebted to the latter for more than $55 million (compared with around $37 million in 2016), according to the documents consulted by the consortium.

"The documents do not specify whether this money was transferred in cash to Cyprus or whether it was a writing game," notes Daraj. In the first case, this appear to be counterintuitive to the informal capital controls imposed by banks, continues the article, while in the second case, it could be an attempt to secure a claim for this amount against the Bank of Beirut, which he could claim in the event of the latter's "bankruptcy, for example," continues the consortium, which has been unable to obtain answers from Sfeir on all these points.

In parallel, the investigation reveals that Bank of Beirut benefited from a BDL loan of "$428 million on Jan. 25, 2020" and that Bank of Beirut transferred "$466 million" out of Lebanon (without specifying the destination or recipient) after the outbreak of the crisis and the imposition of informal restrictions on foreign currency transfers.

"Many questions remain about the financial maneuvers," concedes Daraj, which was unable to determine whether the actions might constitute legal offenses, and says it has handed "these documents and findings over to the Lebanese judiciary, as it is necessary to hold to account those who were able to preserve their wealth at the expense of the savings of small and medium-sized depositors."