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Saturday, November 30, 2013

Chahbahar to eclipse Gwader Viability : New Iranian port project

Iranian port project November 30, 2013 - 5:35:17 am NEW DELHI: India is sending a team to Iran to speed up work on a port that will provide access to resource-rich Central Asia and Afghanistan, officials said, moving quickly to take advantage of a thaw in Iran’s relations with the West. The port of Chabahar in southeast Iran is central to India’s efforts to circumvent Pakistan and open up a route to landlocked Afghanistan where it has developed close security ties and economic interests. The port, which India is partly financing, will also be another gateway to Iran itself for Indian commerce. Work has been slow on expanding berthing facilities and container terminals, partly because India has been reluctant to press ahead too enthusiastically for fear of upsetting the United States, keen to isolate Iran over its nuclear ambitions. On Monday, just after Iran sealed an initial accord with six powers including the United States to limit its nuclear programme in exchange for the easing of some sanctions, Indian Foreign Secretary Sujatha Singh met Iranian Deputy Foreign Minister Ebrahim Rahimpour to discuss economic opportunities. The Iranian official was in New Delhi on a pre-arranged visit but as news of the deal in Geneva broke, the talks turned to ways to fast-track the long-running port project. “For us, Chabahar is a strategic necessity, otherwise we don’t have access to Afghanistan and central Asia,” a foreign ministry official said. Pakistan, loath to see growing Indian influence in Afghanistan, does not allow India to send goods through its territory to Afghanistan and has only recently begun to allow a trickle of Afghan exports to cross through to India. The Indian ministry official said while India’s involvement in the port development was not strictly under the international sanctions that had been imposed on Iran, any improvement in Iran’s ties with the West would build confidence in the project. “The Geneva agreement certainly opens up the space to pursue this at greater pace.” India has committed $100 million to upgrading facilities at the port after spending $100 million on building a 220-km (140-mile) road in a dangerous stretch of western Afghanistan to link up with Chabahar. The port on the Gulf of Oman is 72km from Pakistan’s deep-water Gwadar port, which China has built as part of a plan to open up an energy and trade corridor from the Gulf, across Pakistan to western China. Both India and China have been trying to secure energy supplies for their growing economies, investing in projects abroad and offering engineering and financial assistance in a race that extends from Africa to Latin America. Chabahar is the first foreign port that India is directly involved in developing. India is struggling to modernise its own congested ports. China, on the other hand has helped build a string of ports in foreign countries, including Gwadar and Sri Lanka’s Hambantota port. “Chabahar is going to see more Indian attention over the next few months,” said Shashank Joshi, who specialises in the Middle East and South Asia at the London-based Royal United Services Institute. “India was caught by surprise over the nuclear deal, and it does not want to be caught sleeping if a US-Iran thaw develops quickly.” A team from the state-run Jawaharlal Nehru Port Trust which manages India’s largest container port near Mumbai and the Kandla Port Trust will travel to Chabahar in the next few weeks and stay a month for a technical and commercial assessment. “We have an opportunity here, the port has a strategic location,” said an official at the Jawaharlal Nehru Port Trust. “But we also need to see the viability. There are not many ships going there at the moment. We have to make projections about traffic, revenue.” reuters

Friday, November 29, 2013

Iran shakes up foundation controlled by Ayatollah's business empire

Thu, Nov 28 16:37 PM EST image By Steve Stecklow LONDON (Reuters) - A multi-billion dollar organization controlled by Iran's supreme leader shook up the management of its charity division, appointing as its new chief a man involved in the confiscation of thousands of properties from Iranian citizens. Aref Norozi was named director general of the Barakat Foundation, Iran's state news agency reported on Wednesday. The foundation is a unit of a massive business empire controlled by Ayatollah Ali Khamenei that is known as Setad Ejraiye Farmane Hazrate Emam. The report by the Islamic Republic News Agency stated that Setad's president, Mohammad Mokhber, had ordered the appointment of Norozi, who once headed Setad's real-estate division and served on the boards of several Setad-linked companies. As a result of Norozi's professional experience, the report said, "It is expected that the Barakat Foundation's activities will be more extensive than before." Reuters this month published a three-part series entitled Assets of the Ayatollah (http://www.reuters.com/investigates/iran/) detailing how Setad has become one of the most powerful institutions in Iran through the systematic seizure and sale of thousands of properties belonging to ordinary Iranians. The series reported Norozi had stated at a press conference in 2008 that Setad's properties were then worth about $52 billion. Setad's total worth is difficult to pinpoint because of the secrecy of its accounts. But its holdings of real estate, corporate stakes in a variety of industries and other assets total about $95 billion, Reuters has calculated. Through Setad, Khamenei has at his disposal financial resources whose value rivals the holdings of the shah, the late Western-backed monarch who was overthrown in 1979. Setad also controls the Barakat Foundation, a charity focused on economic development projects in rural areas and that has stakes in the country's pharmaceutical industry. A Setad official said in April that through Barakat, Setad had spent more than $1.6 billion in the past five years on development projects. But Setad's claims about its charity spending are impossible to verify because its accounts are not publicly available. IRNA last week denounced the Reuters series as "disinformation" intended to undermine public trust in the Islamic Republic's institutions. A Reuters spokesperson said the news agency stood by the accuracy and fairness of its stories. IRNA said that in the past five years Barakat has been involved in numerous economic development projects, including building schools, roads, housing units and mosques, as well as providing water and electricity. According to IRNA, Barakat was created following an order Khamenei gave to the head of Setad. "Solving the problems of the deprived has been on my mind," IRNA quoted Iran's supreme leader as saying. "For example, solve the problems of 1,000 villages. It would be good to develop 1,000 places or to build 1,000 schools. Prepare this organisation for this task." A spokesman for Setad did not respond to a request for comment about Norozi's appointment. (This version of the story fixes a typo in Norozi's name in the second paragraph.) (Additional reporting by Babak Dehghanpisheh; Edited by Michael Williams and Simon Robinson) ============================== =============== 1: Land Grab2: National Champion3: Rough JusticeAbout the series inShareKhamenei controls massive financial empire built on property seizuresBy Steve Stecklow, Babak Dehghanpisheh and Yeganeh Torbati Filed November 11, 2013 Read in Persian [PDF] Read in Arabic [PDF] SUPREME LEADER: Ayatollah Ali Khamenei, shown at a 2009 clerical gathering, oversees an organization called Setad that has assets estimated at about $95 billion. REUTERS/Khamenei.ir/Handout Part 1: A Reuters investigation details a key to the supreme leader’s power: a little-known organization created to help the poor that morphed into a business juggernaut worth tens of billions of dollars. The 82-year-old Iranian woman keeps the documents that upended her life in an old suitcase near her bed. She removes them carefully and peers at the tiny Persian script. There's the court order authorizing the takeover of her children's three Tehran apartments in a multi-story building the family had owned for years. There's the letter announcing the sale of one of the units. And there's the notice demanding she pay rent on her own apartment on the top floor. Pari Vahdat-e-Hagh ultimately lost her property. It was taken by an organization that is controlled by the most powerful man in Iran: Supreme Leader Ayatollah Ali Khamenei. She now lives alone in a cramped, three-room apartment in Europe, thousands of miles from Tehran. The Persian name of the organization that hounded her for years is "Setad Ejraiye Farmane Hazrate Emam" – Headquarters for Executing the Order of the Imam. The name refers to an edict signed by the Islamic Republic's first leader, Ayatollah Ruhollah Khomeini, shortly before his death in 1989. His order spawned a new entity to manage and sell properties abandoned in the chaotic years after the 1979 Islamic Revolution. Setad has become one of the most powerful organizations in Iran, though many Iranians, and the wider world, know very little about it. In the past six years, it has morphed into a business juggernaut that now holds stakes in nearly every sector of Iranian industry, including finance, oil, telecommunications, the production of birth-control pills and even ostrich farming. The organization's total worth is difficult to pinpoint because of the secrecy of its accounts. But Setad's holdings of real estate, corporate stakes and other assets total about $95 billion, Reuters has calculated. That estimate is based on an analysis of statements by Setad officials, data from the Tehran Stock Exchange and company websites, and information from the U.S. Treasury Department. Just one person controls that economic empire – Khamenei. As Iran's top cleric, he has the final say on all governmental matters. His purview includes his nation's controversial nuclear program, which was the subject of intense negotiations between Iranian and international diplomats in Geneva that ended Sunday without an agreement. It is Khamenei who will set Iran's course in the nuclear talks and other recent efforts by the new president, Hassan Rouhani, to improve relations with Washington. Related Item Minority report: Why Baha’is face persecution in Iran The supreme leader's acolytes praise his spartan lifestyle, and point to his modest wardrobe and a threadbare carpet in his Tehran home. Reuters found no evidence that Khamenei is tapping Setad to enrich himself. But Setad has empowered him. Through Setad, Khamenei has at his disposal financial resources whose value rivals the holdings of the shah, the Western-backed monarch who was overthrown in 1979. How Setad came into those assets also mirrors how the deposed monarchy obtained much of its fortune - by confiscating real estate. A six-month Reuters investigation has found that Setad built its empire on the systematic seizure of thousands of properties belonging to ordinary Iranians: members of religious minorities like Vahdat-e-Hagh, who is Baha'i, as well as Shi'ite Muslims, business people and Iranians living abroad. Setad has amassed a giant portfolio of real estate by claiming in Iranian courts, sometimes falsely, that the properties are abandoned. The organization now holds a court-ordered monopoly on taking property in the name of the supreme leader, and regularly sells the seized properties at auction or seeks to extract payments from the original owners. The supreme leader also oversaw the creation of a body of legal rulings and executive orders that enabled and safeguarded Setad's asset acquisitions. "No supervisory organization can question its property," said Naghi Mahmoudi, an Iranian lawyer who left Iran in 2010 and now lives in Germany. Khamenei's grip on Iran's politics and its military forces has been apparent for years. The investigation into Setad shows that there is a third dimension to his power: economic might. The revenue stream generated by Setad helps explain why Khamenei has not only held on for 24 years but also in some ways has more control than even his revered predecessor. Setad gives him the financial means to operate independently of parliament and the national budget, insulating him from Iran's messy factional infighting. Washington has acknowledged Setad's importance. In June, the Treasury Department imposed sanctions on Setad and some of its corporate holdings, calling the organization "a massive network of front companies hiding assets on behalf of … Iran's leadership." The companies generate billions of dollars in revenue a year, the department stated, but it did not offer a detailed accounting. The Iranian president's office and the foreign ministry didn't respond to requests for comment. Iran's embassy in the United Arab Emirates issued a statement calling Reuters' findings "scattered and disparate" and said that "none has any basis." It didn't elaborate. Setad's director general of public relations, Hamid Vaezi, said by email in response to a detailed description of this series that the information presented is "far from realities and is not correct." He didn't go into specifics. In a subsequent message, he said Setad disputes the Treasury's allegations and is "in the process of retaining U.S. counsel to address this matter." He added: "This communication puts you on notice that any action by your organization could prejudice our dispute in the United States and harm our position for which we hold you responsible." When Khomeini, the first supreme leader, set in motion the creation of Setad, it was only supposed to manage and sell properties "without owners" and direct much of the proceeds to charity. Setad was to use the funds to assist war veterans, war widows "and the downtrodden." According to one of its co-founders, Setad was to operate for no more than two years. Setad has built schools, roads and health clinics, and provided electricity and water in rural and impoverished areas. It has assisted entrepreneurs in development projects. But philanthropy is just a small part of Setad's overall operations. Under Khamenei's control, Setad began acquiring property for itself, and kept much of the funds rather than simply redistributing them. With those revenues, the organization also helps to fund the ultimate seat of power in Iran, the Beite Rahbar, or Leader's House, according to a former Setad employee and other people familiar with the matter. The first supreme leader, Khomeini, had a small staff. To run the country today, Khamenei employs about 500 people in his administrative offices, many recruited from the military and security services. A complete picture of Setad's spending and income isn't possible. Its books are off limits even to Iran's legislative branch. In 2008, the Iranian Parliament voted to prohibit itself from monitoring organizations that the supreme leader controls, except with his permission. But Reuters has put together the fullest account yet of the organization's holdings. They include: Loading... If this message does not disapper you could be using an outdated browser and cannot view this interactive. Please upgrade your browser or activate Google Chrome Frame to improve your experience. * A giant property portfolio The head of Setad's real-estate division said at a ceremony in 2008 that the unit was worth about $52 billion. The value of Iran's currency has plunged since then, while property values have soared. The property portfolio has also changed, so its current value is hard to establish. Setad regularly conducts large auctions of its real estate - at least 59 to date, according to a review of Iranian newspaper advertisements and auction websites. One recent auction took place in May, when nearly 300 properties went on the block - including houses, stores, tracts of farmland and even a spa-and-pool complex in Tehran. The required opening bids totaled about $88 million, based on the official exchange rate that month. * An investment unit worth tens of billions of dollars In June, the U.S. Treasury Department sanctioned Setad and 37 companies it controls over the organization's alleged role in "assisting the Iranian Government's circumvention of U.S. and international sanctions." The Treasury also said Setad played a role in "generating revenue for the Iranian leadership," and that one of its investment companies alone was worth about $40 billion in late 2010. But the June action covered just part of Setad's corporate holdings. According to a Treasury spokesman, sanctions only apply to subsidiaries if the targeted entity "owns 50 percent or more of a company." In practice, Setad controls many businesses in which it holds very small stakes. Reuters identified at least 24 public companies in which Setad - or a company it invested in - held less than 50 percent. Those holdings that are publicly traded are worth more than $3.4 billion, Reuters calculated. That figure includes about $3 billion Setad paid in 2009 for a stake in Iran's largest telecommunications firm. Reuters also identified 14 companies Setad has invested in - directly or through other companies - that couldn't be valued because they are not publicly traded. All told, Reuters was able to identify about $95 billion in property and corporate assets controlled by Setad. That amount is roughly 40 percent bigger than the country's total oil exports last year. It also surpasses independent historians' estimates of the late shah's wealth. After toppling the monarchy, the Islamic Republic filed suit in the United States against the shah and his wife, Farah Pahlavi, claiming they had stolen $35 billion in Iranian funds, according to court records. In today's dollars, that sum would be worth about $79 billion. The suit was dismissed. Abbas Milani, director of the Iranian Studies program at Stanford University who wrote a biography of the shah published in 2011, told Reuters he believes the estimate of the shah's fortune was "extremely exaggerated." He said the monarch led a truly opulent lifestyle - including owning an automobile collection that may have included 120 fancy vehicles. But, he wrote in the biography: "Those most likely to know estimate the Shah's fortune to be close to a billion dollars." With inflation, that would equal about $3 billion in today's money, a fraction of the worth of Setad's holdings. “How can a government that claims to be an Islamic government allow this to happen?” Heideh Katirai, Iranian exile whose family property was seized by Setad PROTECTION FEES Setad officials have offered two justifications for their property activities: that the assets were acquired legitimately, and part of the profits go to charity. In an interview in April with the Iranian reformist newspaper Shargh, Ali Ashraf Afkhami, who was identified as the head of Tadbir Economic Development Group - the main unit that handles Setad's financial investments - called the organization a "custodian" of "property without owners," and suggested that none had been confiscated. He also described the way Setad had accumulated its real estate as nothing unusual. "Imagine that a property or piece of land has been left behind by someone after their death without any heirs or, for example, property that has been freed by customs but remains without an owner," he said. "These properties must be managed somehow. If the lack of ownership is confirmed through the order of the court, then the property is given to Setad." "Like I said," he added, "everywhere in the world systems have been created to take control of property or pieces of land that have no owners and the profits are put toward activities for the public good." Charities have played an important role in the Islamic Republic. Setad controls a charity. Other charitable trusts, known as "bonyads," served as a vital safety net during and after the 1980-1988 Iran-Iraq War, assisting disabled veterans, widows and orphans, and the poor. According to the son of one slain soldier, Bonyad Shahid (Martyrs Foundation) provided his and other families' accommodation, wages and household items. A list of current veteran services on its website includes discount airplane tickets, technical training and the installation of wheelchair lifts on vehicles. Setad, however, is a much broader operation than these foundations. It's unclear how much of its revenue goes to philanthropy. Iranians whose properties have been seized by Setad, as well as lawyers who have handled such cases, dispute the argument that the organization is acting in the public interest. They described to Reuters what amounts to a methodical moneymaking scheme in which Setad obtains court orders under false pretenses to seize properties, and later pressures owners to buy them back or pay huge fees to recover them. "The people who request the confiscation … introduce themselves as on the side of the Islamic Republic, and try to portray the person whose property they want confiscated as a bad person, someone who is against the revolution, someone who was tied to the old regime," said Hossein Raeesi, a human-rights attorney who practiced in Iran for 20 years and handled some property confiscation cases. "The atmosphere there is not fair." Ross K. Reghabi, an Iranian lawyer in Beverly Hills, California, said the only hope to recover anything is to pay off well-connected agents in Iran. "By the time you pay off everybody, it comes to 50 percent" of the property's value, said Reghabi, who says he has handled 11 property confiscation cases involving Setad. An Iranian Shi'ite Muslim businessman now living abroad, who asked to remain anonymous because he still travels to Iran, said he attempted two years ago to sell a piece of land near Tehran that his family had long owned. Local authorities informed him that he needed a "no objection letter" from Setad. The businessman said he visited Setad's local office and was required to pay a bribe of several hundred dollars to the clerks to locate his file and expedite the process. He said he then was told he had to pay a fee, because Setad had "protected" his family's land from squatters for decades. He would be assessed between 2 percent and 2.5 percent of the property's value for every year. Setad sent an appraiser to determine the property's current worth. The appraisal came in at $90,000. The protection fee, he said, totaled $50,000. The businessman said he balked, arguing there was no evidence Setad had done anything to protect the land. He said the Setad representatives wouldn't budge on the amount but offered to facilitate the transaction by selling the land itself to recover its fee. He said he hired a lawyer who advised him to pay the fee, which he reluctantly did last year. This was not the only encounter the businessman's family has had with Setad. He said his sister, who lives in Tehran, recently told him that Setad representatives had gone door-to-door at her apartment complex, demanding occupants show the deeds for their units. Several other Iranians whose family properties were taken over by Setad described in interviews how men showed up and threatened to use violence if the owners didn't leave the premises at once. One man said he had been told how an elderly family member had stood by distraught as workmen carried out all of the furniture from her home. According to this account, she sat down on a carpet, refused to move and pleaded, "What can I do? Where can I go?" "Then they reached down, lifted her up on the carpet and took her out." "BEHIND THE DOORS" Several Iranian foundations, such as Bonyad Mostazafan (The Foundation of the Oppressed), also have been granted legal authority to confiscate certain properties. Those organizations generally are open about the practice, listing their names and logos in real-estate advertisements. Setad's role in confiscations is more hidden. Neither Setad's logo nor its full name appear in newspaper advertisements listing upcoming auctions. Instead, the organization uses a vague title that doesn't make clear the seller is connected to Setad. A call by a reporter to one of the phone numbers listed in an advertisement in May for property in the northeastern city of Mashhad was greeted by a recording that said: "You have reached Setad Ejraiye Farmane Hazrate Emam." Many of the newspaper ads found by Reuters also referred readers to a website for further information. That site doesn't contain Setad's proper name either. Internet website ownership records show that the site, which lists auctions for many types of confiscated goods - including boats, motorcycles, flat-screen televisions, automobiles and even fertilizer - is registered to an office in Tehran. When a reporter called it, the person who answered confirmed it was Setad's office. Some of the properties under Setad's control were confiscated from religious minorities, including members of the Baha'i faith, a religion founded in Iran that is seen as heretical by the Islamic Republic. Baha'is are a persecuted religious group in Iran, with some followers blocked from jobs and universities. Baha'i shops and cemeteries also have been vandalized. Figures compiled by the United Nations office of the Baha'i International Community, a non-governmental organization, show that Setad was occupying 73 properties seized from its members as of 2003, the most recent data available. The real estate was then worth about $11 million. That figure captured only a fraction of the value of Baha'i properties taken by Setad. Not on the list were several that belonged to a Baha'i named Aminullah Katirai. According to his daughter, Heideh Katirai, who now lives in Toronto, Setad has been pursuing her family's property for more than two decades. Her father owned a house and land around the city of Hamedan in northwest Iran, she said. In the early 1990s, Setad confiscated about 750 hectares (1,853 acres) - the family's entire land holdings in the area. Court records documenting the property seizures that were reviewed by Reuters claim Katirai had collaborated with the prior government of the shah. Katirai's daughter says her father never had any ties to the shah's government. He tried to appeal to government authorities: He wrote a letter to a parliamentary commission in 1993 stating he was being targeted solely because of his religion. In a response seen by Reuters, a commission representative cited Article 13 of Iran's constitution, which says that only Zoroastrians, Jews and Christians are recognized as religious minorities and have the right to practice their religion within the limits of the law. "The Baha'i faith is not among religion minorities," a translation of the letter stated. The commission refused to consider his case. Setad did not stop there. According to his daughter, Setad representatives showed up several years later at a three-story building her family had owned in central Tehran for 44 years. At the time, Katirai lived on the ground floor, and the upper floors were rented out. According to his daughter, the Setad representatives claimed the building's owner had left the country and had abandoned it. Katirai told the Setad representatives repeatedly that he owned the building. They left, but Setad soon began court proceedings to take it over. In 2008, Katirai died. For the past five years, Setad has been trying to evict the tenants, including Katirai's son, producing court notices and threatening fines. "Each corner of that house is a memory for us," said Katirai's daughter. "I took my kids there every Friday to see the family." "What has my family done to deserve this kind of treatment?" she asked. "We know that Islam is a religion of peace. But how can a government that claims to be an Islamic government allow this to happen?" Mohammad Nayyeri, a lawyer who worked in Iran until 2010 and now lives in Britain, said he handled a case involving Setad in which a Muslim man's house had been confiscated in part based on rumors that he had converted to the Baha'i faith and had ties with the monarchy. The man - Nayyeri declined to name him because he still has family in Iran - relocated to the United States soon after the 1979 revolution. The new government seized the man's home, in a wealthy Tehran neighborhood. "The Baha'i rumor was one of the triggers of this," Nayyeri said. "They found that this house is empty and the owner had left the country so they came and seized the place." Around 1990, the property was given to Setad, which sold it at auction. NEW HEIGHTS: A builder at work on a high rise in north Tehran in 2010. Property prices have soared in Iran's capital in recent years. REUTERS/Stringer Nayyeri said that in 2008, the owner's son contacted him. By then, the man had died. The son - who told the lawyer his father had never converted to the Baha'i faith and had no ties to the monarchy - wanted to clear his name and try to recover the house. Nayyeri said he lodged a complaint against Setad and the current owner and successfully challenged the original confiscation. He ultimately obtained a judicial order that the property be returned to the son. But Setad refused to give it back unless the son offered a "khoms," a religious payment mandated under Islamic law, Nayyeri said. It totaled $50,000 - 20 percent of the property's assessed value. According to the lawyer, the son had no choice, and paid it. Reghabi, the Iranian lawyer based in California, said he, too, won a number of property seizure cases involving Setad. But he said no case was simple - the hurdles involved not only untangling a property's ownership and challenging decades-old court decrees, but also identifying and paying off people with connections to the key decision maker. "The real stuff is what goes on behind the doors," he said. "You have to find the right person." Reghabi said his clients were responsible for paying the various fees, which were all "subject to negotiation" and could reach millions of dollars. He added that he always advised clients whose properties had been sold by Setad to try to recover some of the sale proceeds in cash. "That is my advice to them – don't try and be stupid and get your property back." "COME AND KILL ME" “This was my property and my family’s property that was built with the blood of myself and my husband.” Pari Vahdat-e-Hagh, 82, whose Tehran apartment building was seized The case of Vahdat-e-Hagh, who is Baha'i, involved several Iranian organizations over the years, but none was more relentless than Setad, she said. She said her troubles began in 1981 when her husband, Hussein, began working for a company called Asan Gas that had been set up in part to assist unemployed members of the faith. In September 1981, he was arrested and imprisoned in Tehran. According to Vahdat-e-Hagh, after five months, a cleric from a court sentenced him to death, with no chance to appeal. He was executed in February 1982. "He was shot with nine bullets," she said, her voice cracking. To protest her husband's execution, she began writing letters to senior government officials, including Khamenei, then Iran's president. In 1985, she said, she was jailed for three months. Her protests continued, including a call to Khamenei's office. "I kept begging them to tape my voice, to take my message to Khamenei," she said. Instead, she said, the clerk recorded the conversation and turned the tape over to the intelligence ministry. The widow's account of what happened next is supported by legal notices and official correspondence seen by Reuters. A court later ordered the confiscation of her family's apartments in an affluent area of north Tehran. Her children were out of the country at the time and the court order accused them of proselytizing the Baha'i faith abroad, she said. Two Iranian foundations pressed Vahdat-e-Hagh to turn over her properties to them. She refused, and both eventually dropped the matter, she said. Then, in November 1991, Setad entered the picture. Another court authorized it to confiscate the family's properties in Tehran and the southern city of Shiraz. According to Vahdat-e-Hagh, Setad representatives came to her apartment and threatened to beat her if she did not leave. "One even had his fist balled up one time to punch me," she said. "I told them, 'You can come and kill me.'" CAPITAL VIEW: Setad has sold or managed hundreds of seized properties in Tehran, seen here in 2010. REUTERS/Stringer In January 1992, Setad wrote to the property registry office requesting that the names of Vahdat-e-Hagh's children be removed from the deeds to their apartments. A year later, Setad sent a letter to Vahdat-e-Hagh offering to sell her one of the units. Setad ultimately sold the apartment to an official from Tehran's revolutionary court, she said, who flipped it within a month for a quick profit. Setad later sold three more apartments that belonged to her two other children and late husband. In the fall of 1993, Vahdat-e-Hagh quietly left Iran, telling only a few friends and relatives. It took six years before Setad authorities realized she was no longer living in her apartment, which she had been renting out. In a letter in November 1999, Setad offered to sell her own apartment to her at a discount. She refused. It then demanded she pay rent on the unit. She refused again. The organization eventually sold it. Vahdat-e-Hagh said she later telephoned the new buyer. "This was my property and my family's property that was built with the blood of myself and my husband," she said she told the man. She said he offered her some money, which out of principle she refused. Today, the building appears to be vacant, except for a business on a lower level. Merchants in the neighborhood said the property's present ownership isn't clear and the building may be under the control of an Islamic organization. On the top floor, where Vahdat-e-Hagh once lived, most of the windows are broken. (Additional reporting by Humeyra Pamuk in Ankara) ============

Wednesday, November 27, 2013

British engineer Amec eyeing Foster Wheeler takeover: report

Tue, Nov 26 19:49 PM EST (Reuters) - British engineer Amec (AMEC.L) is eyeing a takeover of U.S.-listed engineering company Foster Wheeler AG (FWLT.O) in a potential deal that could create a 5 billion pound ($8 billion) energy services group, The Times reported on Wednesday, citing sources. The Times said Amec, which provides services and equipment for the oil and gas, mining, nuclear and renewable energy sectors, has appointed Goldman Sachs (GS.N) to advise it on a potential deal. A spokesman for Amec declined to comment. Foster Wheeler could not immediately be reached outside regular business hours. Switzerland-based Foster Wheeler, valued at $2.83 billion, operates through its engineering and construction business and its power business. The Times cited sources who said that Amec and Foster Wheeler may have held talks in the past but were not engaged in discussions currently. Amec, a FTSE 100 company, said in August it was looking to make acquisitions in the oil and gas sector. ($1 = 0.6180 British pounds) (Reporting by Aashika Jain in Bangalore; Editing by Steve Orlofsky)

Tuesday, November 26, 2013

Qatar's Barwa plans $5.5 bln island to house World Cup fans

Mon, May 27 08:48 AM EDT * Island to house floating hotels for 2022 World Cup * Has sold 1 mln sq meters of land for Lusail City stadium * No plans to issue debt this year DOHA, May 27 (Reuters) - Qatar unveiled plans on Monday to build a $5.5 billion island off the coast of Doha with floating hotels to house soccer fans expected to flock to the country for the World Cup in 2022. Plans for Oryx Island, which would feature luxury villas, a water park, and five floating hotels using cruise ships, were unveiled by Qatari developer Barwa Real Estate, part-owned by Qatar's sovereign wealth fund. The hotels would be able to house as many as 25,000 soccer fans, Barwa's Chief Executive Abdulla al-Subaie said at the sidelines of a real estate conference in Doha. Demand for residences and hotel rooms are expected to increase in the tiny Gulf Arab state as projects for the 2022 World Cup tournament come onstream. Qatar, the world's top liquefied natural gas exporter, has allocated 40 percent of its budget to 2016 to infrastructure projects. "We anticipate that there will be a short-term demand for hotel rooms, so maybe it is not wise to offer all these hotel rooms for only a short time," Subaie said. "Oryx Island can accommodate 20,000 to 25,000 people. Cruise ships can be docked for one week, two weeks. It can be mobilized and demobilized for a short time." Oryx Island will cost 20 billion riyals ($5.5 billion) to build, he said, adding that the project was only in the conceptual phase. Subaie said the company had agreed to sell one million square meters of land to Qatar's 2022 Supreme Committee to build Lusail Stadium, where the closing match of the tournament will take place. A price has not been agreed upon, he said. Barwa, the Gulf state's largest listed property developer, has properties in France, Switzerland and the United Kingdom and focuses on retail, office, hospitality and residential developments. Last year it announced plans to launch a $4.9 billion mixed-use Golf City project in its coastal Lusail city development, which will house 4,000 residential units and a golf course. The company has no plans to issue any bonds this year, he added. (Reporting By Regan Doherty and Praveen Menon, Editing by Louise Heavens)

Monday, November 25, 2013

Twin blasts claim five lives in Karachi

People gather at the site of twin blasts in Ancholi area of Karachi. PHOTO: MUHAMMAD NOMAN/EXPRESS KARACHI: Twin explosions ripped through shops and vehicles on the main road leading to Ancholi on Friday, killing at least five people and injuring over 50 others. The first blast took place outside a paan shop in a crowded area. Minutes later, the second blast, yards away from the first, took place outside a restaurant. Both the blasts were almost of the same intensity. Initial reports claimed the blasts were caused by improvised explosive devices (IED). However, officials did not say whether these were timed devices or detonated by remote control. Around 10 shops along with nearby vehicles were damaged in the twin blasts. The blasts occured in a largely Shia populated area, forcing residents to take to the streets. This made it difficult for the police and paramilitary Rangers to cordon off the area. The injured were taken to different hospitals including the Abbasi Shaeed Hospital. Speaking to The Express Tribune, DSP Shahid Abbas said they were still trying to confirm the casualties as the victims were taken to different hospitals. “The miscreants took advantage of the security forces relaxing after the protests were over,” he said. Majlis Wahadat-e-Muslimeen deputy secretary general Allama Sadiq Raza Taqvi condemned the attack, saying that the elements who wanted to promote sectarian violence in the country were behind the attack. The Muttahida Qaumi Movement announced a peaceful day of mourning. Published in The Express Tribune, November 23rd, 2013.

Genel boss Hayward says group’s Kurdistan interests make it attractive to cash-rich bidder

MARKET REPORT: By GEOFF FOSTER PUBLISHED: 22:03, 25 November 2013 | UPDATED: 22:14, 25 November 2013 In the City it’s called talking your book. Tony Hayward, the former boss of BP who now runs Genel Energy, has gone on record as saying the group’s interests in Kurdistan make it look particularly attractive to a cash-rich bidder. On Friday UBS backed that up by saying Genel could be a natural takeover candidate. Buyers chased the shares 37p higher to a close of 1035.49p on the broker’s sexy comments and after last week’s Atlantic Council Energy & Economic Summit, at which attendants heard that the Kurdish regional government in northern Iraq is forging ahead with deals that would let it start piping oil to world markets as early as next year. UBS said that with resources of an estimated 1.8bn barrels of oil, Genel is well positioned when exports begin. A computerised display of the FTSE 100 index Kurdistan is a rare region where multi-billion-barrel oil fields remain accessible but big international companies are under-represented. Rival broker Liberum Capital is a fan and says the key outstanding risk surrounds the payment mechanism. In other words, how will the Kurdistan government and its contractors be paid for exported oil? Genel exported 29,000 barrels per day by truck in the third quarter of 2013, for which it is being paid in full. The Kurdish energy minister said on Friday: ‘Out of the proceeds of sales the contractors will get their share of compensation. We are not planning to touch our share of the net revenue, which is net of contractors and transportation costs.’ From Turkish press (google translation) Nechirvan Barzani and Hawrami in Ankara tomorrow with the agreements. This is good timing just ahead of Sunday's Erbil Oil & Gas cwc conference.... My posts tend to get deleted so someone may want to copy and re-post later.... http://www.dunyabulteni.net/haberler/281276/necirvan-barzani-yarin-turkiyeye-geliyor === ERBIL, Kurdistan Region – The Kurdistan Region is expected to finalize a deal this week to export oil and gas to Turkey as Kurdish Prime Minister Nechirvan Barzani arrives in Ankara. A well-placed source told Rudaw that Barzani and his Turkish counterpart Recep Tayyip Erdogan will seal the final deal allowing exports of Kurdistan’s oil through a recently completed pipeline to Turkey and from there to the world market. Upon his return from Ankara, Barzani is expected to visit Baghdad and discuss the details of the agreement with Iraqi Prime Minister Nuri al-Maliki. Industry reports say that the pipeline, taking Kurdish oil to the Turkish point of Ceyhan, will initially carry 150,000 barrels a day, starting next month. Baghdad opposes any direct oil deals by the autonomous Kurdistan Region, but Barzani has reassured that the agreement between Erbil and Ankara is beneficial to all Iraqi people. Last week, Turkish Energy Minister Taner Yildiz said that the Iraqi people will benefit from the oil deals that are signed with the Kurdistan Region. “The Iraqi government will also get a copy of all receipts of all money kept in Turkish banks,” he said. At a press conference last week, Barzani said that Iraq must pass the oil and gas law that has been sitting in parliament for years. International observers believe that the export of oil and gas will give the Kurdistan Region greater political and economic autonomy. The region is currently dependent on 17 percent of Iraq’s federal budget to run the local government. Since 2007, Erbil and the central government have been at loggerheads over the autonomous region’s natural resources. Iraqi leaders say that Baghdad has the sole authority over the country’s oil and gas, while the Kurdistan Regional Government (KRG) argues that the constitution grants it the right to extract and export Kurdistan’s own oil. Kurdistan’s Minister of Natural Resources Ashti Hawrami has stressed in the past that Kurdish oil exports should not worry Baghdad because the revenues are shared with the central government. Rudaw has learned that Hawrami was in Ankara last week to arrange the final details for this week’s agreement between Barzani and Erdogan. Yildiz also said earlier this month that his government was planning to mediate between Erbil and Baghdad over outstanding energy issues. "We are trying to establish a method which we believe will counter the concerns of the central Iraqi government,” he said. “So far, the Kurdistan Regional Government and central government have not been able to establish the system they wished," Reuters quoted Yildiz as saying. “The distribution of the revenues would be carried out by Iraq; we would only hold these deposits at a Turkish state bank," the Turkish energy minister added. Kurdish leaders have complained that the central government has failed to pay the fees of foreign oil companies operating in the Kurdistan Region, estimated at $5 billion. Earlier this month, Erbil and Ankara finalized a comprehensive energy package that includes the building of a second pipeline connecting the Kurdistan Region’s oil and gas to the world market via Turkey. - See more at: ==================== ERBIL, Kurdistan Region – The Kurdistan Region is expected to finalize a deal this week to export oil and gas to Turkey as Kurdish Prime Minister Nechirvan Barzani arrives in Ankara. A well-placed source told Rudaw that Barzani and his Turkish counterpart Recep Tayyip Erdogan will seal the final deal allowing exports of Kurdistan’s oil through a recently completed pipeline to Turkey and from there to the world market. Upon his return from Ankara, Barzani is expected to visit Baghdad and discuss the details of the agreement with Iraqi Prime Minister Nuri al-Maliki. Industry reports say that the pipeline, taking Kurdish oil to the Turkish point of Ceyhan, will initially carry 150,000 barrels a day, starting next month. Baghdad opposes any direct oil deals by the autonomous Kurdistan Region, but Barzani has reassured that the agreement between Erbil and Ankara is beneficial to all Iraqi people. Last week, Turkish Energy Minister Taner Yildiz said that the Iraqi people will benefit from the oil deals that are signed with the Kurdistan Region. “The Iraqi government will also get a copy of all receipts of all money kept in Turkish banks,” he said. At a press conference last week, Barzani said that Iraq must pass the oil and gas law that has been sitting in parliament for years. International observers believe that the export of oil and gas will give the Kurdistan Region greater political and economic autonomy. The region is currently dependent on 17 percent of Iraq’s federal budget to run the local government. Since 2007, Erbil and the central government have been at loggerheads over the autonomous region’s natural resources. Iraqi leaders say that Baghdad has the sole authority over the country’s oil and gas, while the Kurdistan Regional Government (KRG) argues that the constitution grants it the right to extract and export Kurdistan’s own oil. Kurdistan’s Minister of Natural Resources Ashti Hawrami has stressed in the past that Kurdish oil exports should not worry Baghdad because the revenues are shared with the central government. Rudaw has learned that Hawrami was in Ankara last week to arrange the final details for this week’s agreement between Barzani and Erdogan. Yildiz also said earlier this month that his government was planning to mediate between Erbil and Baghdad over outstanding energy issues. "We are trying to establish a method which we believe will counter the concerns of the central Iraqi government,” he said. “So far, the Kurdistan Regional Government and central government have not been able to establish the system they wished," Reuters quoted Yildiz as saying. “The distribution of the revenues would be carried out by Iraq; we would only hold these deposits at a Turkish state bank," the Turkish energy minister added. Kurdish leaders have complained that the central government has failed to pay the fees of foreign oil companies operating in the Kurdistan Region, estimated at $5 billion. Earlier this month, Erbil and Ankara finalized a comprehensive energy package that includes the building of a second pipeline connecting the Kurdistan Region’s oil and gas to the world market via Turkey. - See more at: ============== Gulf Keystone Petroleum Gulf Keystone Petroleum (LSE:GKP) saw a price dip of 2.5p (1.5%) to 167p on the day the firm updated us on the progress of its litigation involving Excalibur Ventures. In September, the English Commercial Court gave a summary judgment dismissing Excalibur’s claims, and has now said it will hand down its full judgment on 13 December. The whole issue has delayed Gulf Keystone’s move to the LSE’s main market, and the firm now expects the move to be complete “as soon as practicable” in 2014. ===================== Turkey and Iraqi Kurdistan sign energy deal November 30, 2013 - 5:48:53 am ANKARA: Turkey and Iraqi Kurdistan signed a multi-billion-dollar energy package this week that will help transform the semi-autonomous region into an oil and gas powerhouse but infuriate a central Baghdad government wary of increasing Kurdish autonomy. The move follows months of negotiations and was cited by sources close to the deal yesterday after being kept secret for two days, apparently because of its sensitivity. Baghdad says any independent Kurdish oil exports are illegal and that it has the sole authority to manage Iraqi oil. For energy-hungry Turkey, dependent on imports for almost all of its needs, exploiting Iraqi Kurdistan’s rich hydrocarbon resources will help diversify its energy supplies and reduce the country’s ballooning $60bn energy bill. Ankara’s relations with the Kurds of northern Iraq were long encumbered by Turkey’s battle with Kurdish separatists on its own soil. But in recent years trade and political relations have flourished, both sides benefiting from commerce across the frontier. The energy deal came in the early hours of a frosty Wednesday morning in Ankara, and was signed during a three-hour meeting between Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani and Turkish Prime Minister Tayyip Erdogan. “This is the most comprehensive energy deal in Turkey’s history,” a source close to the matter said. “But due to political sensitivities, both sides are taking their time to announce it.” Neither the Turkish prime minister’s office nor the energy ministry confirmed the signatures following Wednesday’s meeting. On Friday, the energy ministry declined to comment. Officials in the office of Iraq’s deputy prime minister for energy, Hussain Al Shahristani, were not immediately available for comment. Sources say neither the Turks nor the Kurds wanted to celebrate openly while efforts to get the Iraqi central government on board continue, even though Baghdad can do nothing to stop the process. Baghdad has long claimed the sole authority to manage Iraqi oil and says Kurdish efforts towards oil independence could lead to the break-up of Iraq. Turkey’s courtship of Kurds has also raised concern in Washington. But Turkey has repeatedly said it respects Iraq’s sensitivities over territorial integrity and that increasing oil revenues will help the whole of Iraq. Oil exports from the Kurdish region via an Iraq-Turkey pipeline had dried up due to a row over the sharing of oil revenues. The deal between Turkey and the Kurds also offers a solution to the payment problems. Crude flow in the KRG’s new pipeline is to start soon, and will link with the 40-inch-wide existing Kirkuk-Ceyhan pipeline to be exported to world markets. As part of the deal, state-backed Turkish Energy Company (TEC), which Ankara set up to work in northern Iraq, has signed a contract to operate in 13 exploration blocks. In about half of those, it is teaming up with US oil giant ExxonMobil. ========================

Saturday, November 23, 2013

Unbelievable Christmas present - the capacity to maintain this (nuclear) breakout capability for practically no concessions at all

Iran, six world powers clinch breakthrough nuclear deal Sat, Nov 23 22:56 PM EST 1 of 5 By Parisa Hafezi and Justyna Pawlak GENEVA (Reuters) - Iran and six world powers reached a breakthrough agreement early on Sunday to curb Tehran's nuclear program in exchange for limited sanctions relief, in a first step towards resolving a dangerous decade-old standoff. The deal between the Islamic state and the United States, France, Germany, Britain, China and Russia was nailed down after more than four days of negotiations. "We have reached an agreement," Iranian Foreign Minister Mohammad Javad Zarif announced on his Twitter feed. French Foreign Minister Laurent Fabius also confirmed the deal. Iran will get access to $4.2 billion in foreign exchange as part of the accord, a Western diplomat said. No other details of the agreement were immediately available. U.S. Secretary of State John Kerry and foreign ministers of the five other world powers joined the negotiations with Iran early on Saturday as the two sides appeared to be edging closer to a long-sought preliminary agreement. The talks were aimed at finding a package of confidence-building steps to ease decades of tensions and banish the specter of a Middle East war over Tehran's nuclear aspirations. The Western powers' goal had been to cap Iran's nuclear energy program, which has a history of evading U.N. inspections and investigations, to remove any risk of Tehran covertly refining uranium to a level suitable for bombs. Tehran denies it would ever "weaponise" enrichment. The draft deal that had been under discussion in Geneva would see Iran suspend its higher-grade uranium enrichment in exchange for the release of billions of dollars in Iranian funds frozen in foreign bank accounts, and renewed trade in precious metals, petrochemicals and aircraft parts. Refined uranium can be used to fuel nuclear power plants - Iran's stated goal - but also provide the fissile core of an atomic bomb if refined much further. Diplomacy was stepped up after the landslide election of Hassan Rouhani, a relative moderate, as Iranian president in June, replacing bellicose nationalist Mahmoud Ahmadinejad. Rouhani aims to mend fences with big powers and get sanctions lifted. He obtained crucial public backing from Supreme Leader Ayatollah Ali Khamenei, keeping powerful hardline critics at bay. On a Twitter account widely recognized as representing Rouhani, a message said after the agreement was announced, "Iranian people's vote for moderation & constructive engagement + tireless efforts by negotiating teams are to open new horizons." The OPEC producer rejects suspicions it is trying covertly to develop the means to produce nuclear weapons, saying it is stockpiling nuclear material for future atomic power plants. Israel says the deal being offered would give Iran more time to master nuclear technology and amass potential bomb fuel. Prime Minister Benjamin Netanyahu told local media in Moscow that Iran was essentially given an "unbelievable Christmas present - the capacity to maintain this (nuclear) breakout capability for practically no concessions at all". (Additional reporting by Stephanie Nebehay, Fredrik Dahl, John Irish, Arshad Mohammed, Louis Charbonneau in Geneva, Katya Golubkova in Moscow, Isabel Coles in Dubai; Writing by Fredrik Dahl; Editing by Peter Cooney) ========================================== Special Report: 'Great Satan' meets 'Axis of Evil' and strikes a deal Sun, Nov 24 19:30 PM EST By Louis Charbonneau, Parisa Hafezi and Arshad Mohammed GENEVA (Reuters) - Saturday night had turned into Sunday morning and four days of talks over Iran's nuclear program had already gone so far over schedule that the Geneva Intercontinental Hotel had been given over to another event. A black tie charity ball was finishing up and singers with an after party band at a bar above the lobby were crooning out the words to a Johnny Cash song - "I fell into a burning ring of fire" - while weary diplomats in nearby conference rooms were trying to polish off the last touches of an accord. Negotiators emerged complaining that the hotel lobby smelled like beer. At around 2:00 a.m., U.S. Secretary of State John Kerry and counterparts from Britain, China, France, Germany and Russia were brought to a conference room to approve a final text of the agreement which would provide limited relief of sanctions on Iran in return for curbs to its nuclear programme. At the last minute, with the ministers already gathered in the room, an Iranian official called seeking changes. Negotiators for the global powers refused. Finally the ministers were given the all clear. The deal, a decade in the making, would be done at last. Now that the interim deal is signed, talks are far from over as the parties work towards a final accord that would lay to rest all doubts about Iran's nuclear program. "Now the really hard part begins," Kerry told reporters. "We know this." THAW The deal, which represents the most important thaw between the United States and Iran in more than three decades since Iranian revolutionaries held 52 American hostages in the U.S. embassy in Tehran, very nearly did not happen. There was still ample ground to cover on the final day, when U.S. Secretary of State John Kerry arrived, joining foreign ministers from Britain, China, France, Germany and Russia. Officials from several of the countries were doubtful that a deal would be reached. Resentful-sounding European diplomats said their foreign minister bosses had not wanted to come unless a final text was on the table, but had felt obliged to come anyway when Russia's Sergei Lavrov showed up on Friday. When the foreign ministers arrived, some junior diplomats and journalists were evicted from their hotel rooms to clear space for the VIPs. After his trans-Atlantic flight on Saturday morning, Kerry met his Iranian opposite number Mohammad Zarif, with European Union foreign policy chief Catherine Ashton, who has led negotiations on behalf of the powers. According to a senior U.S. State Department official, Kerry told Zarif there could be no more delay. President Barack Obama's administration would call for even tighter sanctions on Iran unless a deal was reached now. Congress members were demanding new sanctions and the White House would join them. Kerry made the case that "there would be no way to hold back new sanctions to give room for (a) new round and we would lead the charge for more sanctions if we did not come to agreement," the State Department official said. By Saturday evening, the final language was personally approved by Obama in Washington. In a sign of how big a risk the Obama administration was taking, the main U.S. ally in the Middle East, Israel, decried what it called an "historic mistake", easing sanctions without dismantling Iran's nuclear programme. But Obama said the deal put limits down on Iran's nuclear programme that would make it harder for Tehran to build a weapon and easier for the world to find out if it tried. "Simply put, they cut off Iran's most likely paths to a bomb," Obama said in a late-night appearance at the White House after the deal was reached. Obama was not the only one taking a risk. Iran's new president, the relative moderate Hassan Rouhani, was elected in June and inaugurated in August promising to ease the crippling sanctions. But Iran has invested billions of dollars in a nuclear programme, which its clerical and military establishment believes is a cornerstone of national pride. Before Zarif was sent to Geneva, he and Rouhani had a meeting with Iran's supreme leader, Ayatollah Ali Khamenei, whose approval was absolutely required for any deal. "The leader's main concern is his core supporters, who truly believe that there should be no deal with America, and are closely watching the developments to find a weak point or a failure to blame on the negotiators for betraying the leadership," said a former Iranian official, a relative of Khamenei. SECRET TALKS The deal was in part the result of months of secret talks held with Iran in such out-of-the-way places as Oman, with U.S. officials using military planes, side entrances and service elevators to avoid giving the game away. The talks, the most important contacts in more than three decades during which Iran branded the United States the "Great Satan" and the United States described Iran a part of an "axis of evil" that also included Iraq and North Korea, were confirmed by U.S. officials and a former Iranian official. They illustrate a U.S. desire, dating to the start of Obama's administration in January 2009, to explore whether there might be a way to reconcile two nations that have been hostile since 1979 but were once allies. According to the U.S. official, who spoke on condition of anonymity, key Americans involved in the effort were William Burns, the U.S. deputy secretary of state, and Jake Sullivan, the national security adviser to U.S. Vice President Joe Biden. The two men, at times with other officials such as White House national security staff member Puneet Talwar, met Iranian officials at least five times this year, the official said. Burns, Sullivan and technical experts arrived in Muscat, Oman in March on a military plane - a way to preserve secrecy - to meet Iranians, the official added. That was months before the election of Rouhani, a sign that Iranian officials were already coming round to the idea of talks before he took power. Rouhani defeated more hardline candidates based in part on hopes he would ease sanctions that had taken an increasing severe toll on the Iranian economy since they were sharply tightened by the United States and European Union to hit Iran's crucial oil exports since 2011. A former nuclear negotiator, Rouhani replaced the combative Mahmoud Ahmadinejad. But ultimately no negotiations would have been possible without a nod from the supreme leader, Khamenei. 'GREEN LIGHT' "The leader gave the green light but was not optimistic about the result," said a former Iranian official, who participated in one round of the secret talks. He said the hardest meeting was the first one because of Khamenei's scepticism. The Oman channel itself had been nurtured by Kerry, who, as chairman of the U.S. Senate Foreign Relations Committee before he took over as Secretary of State, made an unannounced trip to the Gulf state to meet Omani officials. After Kerry replaced Hillary Clinton as the top U.S. diplomat on February 1, it was decided the Oman channel would continue to help feed into multi-lateral talks led by the EU's Ashton on behalf of the five permanent U.N. Security Council members plus Germany, the P5+1. Kerry visited Oman himself in May for talks with Omani officials. Around the time that Kerry was taking over the State Department, Zarif's predecessor, Ali Akbar Salehi - then serving as foreign minister under Ahmadinejad - sent an extraordinary three-page, hand-written letter to Khamenei, calling for "broad discussions with the United States". The supreme leader, though cautious about the prospect, sent a reply to Salehi and the rest of the cabinet: he was not optimistic but would not oppose them if they pursued the initiative, several sources said. "Salehi endangered his career - and even his security," said a source who knows Salehi and saw the letter. "But he said this letter will be registered in history." In August, Rouhani put Salehi in charge of Iran's nuclear agency. The senior U.S. official said that four of the secret U.S.-Iranian meetings took place since Rouhani's August inauguration, a sign that the United States was trying to exploit the opportunity presented by the Iranian official's ascent. Kerry met Iran's foreign minister at the U.N. General Assembly in September and, soon thereafter, Obama and Rouhani spoke by telephone, marking the highest-level contact between the United States and Iran since the 1979 Islamic Revolution. Kerry also spoke to the Iranian foreign minister by telephone on October 25 and November 2 - discussions that were not revealed by the State Department at the time. In recent months there has been noticeable change in body language when diplomats from the United States and Iran are in the same room. Whatever the relations between their countries, officials from both sides now appear - normal. During talks in Geneva earlier this month, Reuters spotted U.S. Under-Secretary of State for Political Affairs Wendy Sherman chatting alone in a hotel lobby with Iran's Deputy Foreign Minister Abbas Araqchi. Such casual, cordial meetings in public would have been unthinkable just months ago. Nevertheless, the United States was so eager to keep the role of Burns and Sullivan secret that it brought them to Geneva twice this month for wider talks between Iran and the major powers but left their names off the official delegation list and made them use hotel side entrances and service elevators to keep the secret. FINAL PUSH When the time came for the final push in Geneva, diplomats expected their bosses would not show up until the text was nearly complete. Journalists waited drinking $9 capuccinos and $29 bloody marys at the Intercontinental. Even after the foreign ministers arrived, officials sounded downbeat about the prospected of a deal on the final day. "It's not a done deal. There's a realistic chance but there's a lot of work to do," said German Foreign Minister Guido Westerwelle. One final bone of contention was the Iranian heavy water reactor at Arak, where Western countries suspect Tehran could one day make plutonium for a bomb. "Defining limits on that and what should take place there in this six month period has proved to be quite a task," British Foreign Secretary William Hague said. "However, that has now been agreed. It was the resolution of that problem that helped unlock the agreement." French officials had been holding out in public for a tough line on Iraq, although several Western diplomats said the French were more flexible behind closed doors. The Arak issue was tough, but it wasn't the toughest. Iran and the powers would still have to find language that both sides could find acceptable over what Iran considers its fundamental right to enrich uranium. Before heading to Geneva, Zarif had a crucial meeting with Khamenei in the presence of Rouhani, a senior member of the Iranian delegation said. "The leader underlined the importance of respecting Iran's right to enrich uranium and that he was backing the delegation as long as they respected this red line," said the delegate. According to another source in Iran, Zarif and Rouhani, along with their top allies, later held a three-hour meeting and discussed various "face-saving solutions" of wording designed to be acceptable to both sides. Sunday's agreement said Iran and the major powers aimed to reach a final deal that would "involve a mutually defined enrichment programme with mutually agreed parameters consistent with practical needs, with agreed limits on scope and level of enrichment activities, capacity, where it is carried out, and stocks of enriched uranium, for a period to be agreed upon." Iranian officials can point to the mention of an enrichment programme as a victory that shows they will be allowed to keep it. Western officials say it means no such thing and emphasise all the limits described in the text. The differences in interpretation underscore how difficult it may be to move towards a final deal that would resolve differences once and for all. Progress could easily be stymied. Still, for those on both sides committed to the agreement, it represented an historic victory. "We took a risk," said the former Iranian official who participated in the secret talks with the United States. "But we won." (Additional reporting by John Irish and Justyna Pawlak; Writing by Peter Graff; Editing by Grant McCool) =============================== Analysis: Iran deal bears Obama's personal stamp Mon, Nov 25 18:28 PM EST By Matt Spetalnick WASHINGTON (Reuters) - When push came to shove in the closing hours of marathon negotiations in Geneva on Iran's nuclear program, it was President Barack Obama, back at the White House, who approved the final language on the U.S. side before the historic deal was clinched. It was perhaps only fitting that Obama had the last say. His push for a thaw with Tehran, a longtime U.S. foe, dates back to before his presidency, and no other foreign policy issue bears his personal stamp more since he took office in early 2009. Behind the risky diplomatic opening is a desire for a big legacy-shaping achievement and a deep aversion to getting America entangled in another Middle East conflict - motives that override misgivings to the Iran deal expressed by close allies Israel and Saudi Arabia. That may explain why Obama, even as he left the troubleshooting to Secretary of State John Kerry and gave him much of the credit for securing the diplomatic coup, has taken "ownership" of the Iran issue like no other. His engagement - both in private and in public and according to aides, at a level of minute detail - is in contrast to a more aloof approach as Egypt came under military rule and Syria descended into civil war. "It's the top item on his foreign agenda for the rest of his term," a source close to the White House's thinking said of the Iran issue. "He doesn't want to leave anything to chance." The stakes are enormous for Obama. If the talks break down and Iran dashes to build an atomic bomb before the West can stop it, he could go into the history books as the president whose naivete allowed the Islamic Republic to go nuclear. The breakthrough with Iran is also worrying the many pro-Israel members of Congress, including heavyweights in his own Democratic Party like Senator Charles Schumer. Last weekend's Iran pact - a preliminary agreement on modest sanctions relief in exchange for temporary curbs on Iran's nuclear activities - was no case of accidental diplomacy. Obama promised to seek direct engagement with Iran and other U.S. enemies during the 2008 presidential campaign, drawing accusations from Republicans that he was promoting appeasement. He then used his first inaugural address in 2009 to offer to extend a hand if the Iranian leadership would "unclench their fist." After being snubbed, he galvanized international support for crippling sanctions that ultimately forced Tehran into the latest negotiations. Obama instructed his aides to arrange the historic telephone conversation he had with Iran's relatively moderate new president, Hassan Rouhani, in September, and authorized secret bilateral talks that laid the groundwork for the more formal Geneva rounds between Iran and world powers, U.S. officials say. On Saturday, Kerry spoke by phone to Obama from Geneva to discuss the outstanding issues in the final tense stages of negotiations, a senior State Department official said. "This went all the way up to (Obama) personally approving the final language," the official said. While it may not be unusual for Obama to cast his trained legal eye on government-to-government agreements, his close attention to the wording of the deal-in-the-making underscored the sensitivity of the breakthrough document and his determination to get it right. Once the deal was signed in Switzerland, Obama stepped in front of the cameras at the White House in a rare late-night appearance and hailed it as "an important first step toward a comprehensive solution that addresses our concerns." It was a chance to tout a foreign policy accomplishment at a time when Obama is struggling with a flawed healthcare rollout and low approval ratings at home. AVOIDING MILITARY CONFLICT Obama's words on Saturday night were also infused with an appeal for patience, reflecting the hope that he can escape any decision on going to war with Iran by doing everything possible diplomatically to prevent it from developing a nuclear weapon. "I have a profound responsibility to try to resolve our differences peacefully, rather than rush toward conflict," Obama said. Shaping Obama's thinking are the shadows of long, costly wars in Iraq and Afghanistan. His own aversion to new military interventions - underscored by his last-minute refusal to attack Syria in September - is matched by war-weariness that most polls show has permeated the American public. There can be little doubt that Obama - who meets with presidential scholars and is said to be keenly interested in his place in history as America's first black president - also feels the allure of detente with Iran as a crowning achievement in what has been widely perceived as a less-than-stellar foreign policy record. "Resolving the Iran issue would be a huge boon to his legacy," said Colin Kahl, a former Pentagon official involved in Iran policymaking who now teaches at Georgetown University. Iran has long been a key part of Obama's nuclear disarmament agenda - a diplomatic push that helped him win a Nobel Peace Prize so early in his presidency that many questioned whether he deserved it. CAN MOMENTUM BE SUSTAINED? There is no guarantee that Obama will be able to sustain the momentum of the Geneva talks as critics at home and abroad accuse the president of giving up too much for too little. Conservative critics say Obama's distaste for intervention, in particular his shying away from the bombing of Syria over chemical weapons use, has hurt U.S. credibility with Iran, a key ally of Damascus, and across the Middle East. "One has to wonder if a better deal would have been possible ... had Iran believed there was a real military threat and had the United States not seemed to be so very desperate for a deal," said Elliott Abrams, a foreign policy aide under Obama's predecessor, George W. Bush. Foremost among Obama's motives for a deal with Iran is to keep Washington from facing the prospect of another war in the Muslim world should there be no other way to keep Tehran from getting the bomb. Iran denies it seeks a nuclear weapon. Obama was elected on a platform of opposition to the Iraq war, and many of the foreign policy decisions he has made in nearly five years in office have demonstrated a deep wariness of letting America get militarily involved in foreign crises. "What we're seeing again with Iran is a kind of ‘Obama doctrine' - get America out of old wars and don't get us into risky new ones," said Aaron David Miller, a former Middle East negotiator now at the Woodrow Wilson International Center. Obama also needs to convince anxious Middle East allies to at least tolerate efforts to hammer out a comprehensive deal. "For the Saudis and Israelis, the key will be knowing that the pressure of the existing sanctions will be maintained, that evasion will be blocked, and that we have a clear idea of what we will not permit in any end-game deal," said Dennis Ross, a former Middle East adviser to Obama. The White House denies insinuations from friends and foes in the Middle East that Obama does not have the stomach to use force in the region and points to the overthrow of Libyan leader Muammar Gaddafi in 2011. Even in that case, Obama was accused of "leading from behind" when he opted for a mostly backup role in the NATO air assault there. (Additional reporting by Jeff Mason and Arshad Mohammed; Editing by Alistair Bell, Ross Colvin and Peter Cooney) =========================================================================== Americans back Iran deal by 2-to-1 margin: Reuters/Ipsos poll Tue, Nov 26 20:49 PM EST 1 of 3 By Matt Spetalnick WASHINGTON (Reuters) - Americans back a newly brokered nuclear deal with Iran by a 2-to-1 margin and are very wary of the United States resorting to military action against Tehran even if the historic diplomatic effort falls through, a Reuters/Ipsos poll showed on Tuesday. The findings were rare good news in the polls for President Barack Obama, whose approval ratings have dropped in recent weeks because of the botched rollout of his signature healthcare reform law. According to the Reuters/Ipsos survey, 44 percent of Americans support the interim deal reached between Iran and six world powers in Geneva last weekend, and 22 percent oppose it. While indicating little trust among Americans toward Iranian intentions, the survey also underscored a strong desire to avoid new U.S. military entanglements after long, costly wars in Iraq and Afghanistan. Even if the Iran deal fails, 49 percent want the United States to then increase sanctions and 31 percent think it should launch further diplomacy. But only 20 percent want U.S. military force to be used against Iran. The survey's results suggest that a U.S. public weary of war could help bolster Obama's push to keep Congress from approving new sanctions that would complicate the next round of negotiations for a final agreement with Iran. "This absolutely speaks to war fatigue, where the American appetite for intervention - anywhere - is extremely low," Ipsos pollster Julia Clark said. "It could provide some support with Congress for the arguments being made by the administration." Tehran accepted temporary restrictions on its nuclear program in exchange for limited relief from tough economic sanctions under the Geneva deal, which the White House sees as a "first step" toward ensuring that Iran cannot develop an atomic bomb. Obama and his aides are casting the Iran deal as the best alternative to a new Middle East conflict as they push back against skeptical lawmakers and close U.S. ally Israel who accuse Washington of giving up too much for too little. A number of lawmakers, especially Republicans, have insisted they will try to enact stiffer new sanctions, which the Obama administration says would poison the negotiating atmosphere during the six months allotted to achieve a long-term accord. But signs of significant public support for the Iran deal could give some of Obama's own pro-Israel Democrats, who may fear being branded as inadequately supportive of the Jewish state in the 2014 U.S. congressional elections, political cover to stick with the president. SUPPORT FOR ISRAEL REMAINS HIGH Reflecting deep suspicions over Iran's sincerity after more than three decades of estrangement between the two countries, the poll shows that 63 percent of Americans believe Tehran's nuclear program is intended to develop a bomb - although Iran says the project is only for civilian purposes. Despite that, 65 percent of those polled agreed that the United States "should not become involved in any military action in the Middle East unless America is directly threatened." Only 21 percent disagreed with the statement. There was every indication, however, that American public support for Israel remained high despite Prime Minister Benjamin Netanyahu's denunciation of the Iran deal as a "historic mistake" and new strains in U.S.-Israeli relations. Fifty percent supported the notion that the United States "should use its military power to defend Israel against threats to its security, no matter where they come from." Thirty-one percent disagreed. Even as the poll showed a moderately favorable response to Obama's attempt at rapprochement with Iran, the diplomatic breakthrough did not appear to have offered any immediate political boost at home to the embattled president. Foreign affairs rarely trump domestic matters in terms of presidential popularity. "This might have an effect on some of the political dialogue," Clark said. "But I don't think it's a game-changer that's going to reverse the tide from the president's current pretty negative approval ratings." A separate Reuters/Ipsos tracking poll on Tuesday showed Obama's approval rating languishing at 38 percent, with 56 percent disapproving of the way he is handling his job. He spent the past three days on a swing through Western states trying to recover lost ground over his flawed healthcare rollout. The final outcome of Obama's Iran engagement strategy remains uncertain, but success would mean a big legacy-shaping achievement that might help to polish what is widely perceived to be a less than stellar foreign policy record. But if the talks break down and Iran dashes to build an atomic bomb before the West can stop it, Obama could go into the history books as the president whose naivete allowed the Islamic Republic to go nuclear. The precision of Reuters/Ipsos online polls is measured using a credibility interval. In this case, the poll - which was conducted from Sunday through Tuesday with 591 respondents - has a credibility interval of plus or minus 4.9 percentage points. (Reporting by Matt Spetalnick; Editing by Alistair Bell and Peter Cooney) ==================

Bombs kill nine and wound 54 in northern Iraq

Sat, Nov 23 16:55 PM EST BAGHDAD (Reuters) - A car bomb and a suicide bomber killed at least nine people and wounded 54 in northern Iraq on Saturday, police and medical sources said, in the latest of a wave of attacks in crowded public places. The bombings took place in the town of Tuz Khurmato, 170 km (100 miles) north of the capital Baghdad, in a region which both the central government and autonomous Iraqi Kurdistan claim as theirs. The first bomb detonated in a car in a busy market near a Shi'ite mosque after prayers and was quickly followed by a suicide bomber wearing an explosive vest, the sources said. Iraqi authorities are struggling with the worst violence in at least five years and say Sunni Muslim insurgents linked to al Qaeda are to blame for most of the attacks, which have killed hundreds each month since the beginning of 2013. Since U.S. troops withdrew at the end of 2011, attackers have been increasingly targeting markets, cafes and sports events, rather than just army checkpoints and police patrols. The victims have mainly been civilians in Shi'ite areas. Iraq's sectarian balance has come under pressure from a prolonged political stalemate at home and the civil war in neighboring Syria, where mainly Sunni rebels are fighting to topple a leader backed by Shi'ite Iran. So far Iraqi Shi'ite militias, most of which disarmed in recent years and joined the reconstituted security forces or entered the political process, have largely held their fire. But a worsening Sunni insurgency could prompt Shi'ite militia to again take up arms to defend themselves. This has fuelled fears that Iraq could slide into the kind of sectarian violence of 2006-2007, when tens of thousands were killed. In a sign of growing frustration in the Sunni community, some Sunni Muslim mosques closed in Baghdad on Saturday in a rare protest at recent attacks on worshippers. It was not clear how many mosques in Baghdad had shut down and some in the center of the city remained open. A council of senior clerics said last week that all Sunni mosques in the capital should be shut in protest at the security situation. They said Iraq's security services had not done enough to protect their communities. Two roadside bombs went off near Sunni mosques in the southern and western outskirts of Baghdad after prayers on Friday, killing three worshippers and wounding 12, the police said. No one has claimed responsibility for the attacks but the clerics say there is sustained a campaign against Sunni worshippers and imams. (Reporting by Mustafa Mahmoud in Kirkuk and Ghazwan Hassan in Tikrit; Writing by Sylvia Westall; Editing by Andrew Roche)

Tuesday, November 19, 2013

Take Over Voting Thresholds

Author Lost in Lao Date posted Wednesday 16:59 I have absolutely no desire to get involved with the current level of “Intellectual debate” (LMAO) taking place on this BB. However, there have been suggestions that the current declining share price will expose GKP to a low-ball offer. My initial reaction to that is . . . bring it on. Any offer would be welcome at the moment since I believe that an offer will flush out all potential players, who will need to place their cards on the table. As we have seen before, even the rumour of an offer will have a dramatic upside effect on the current share price. I would also say, that a low ball offer (or any offer for that matter) is merely that . . . an offer to acquire the shares in GKP….. For the offer to have the necessary effect of forcing all shareholders to hand over their shares to the proposed acquirer certain shareholder voting thresholds must be met. Now I fully acknowledge the basic rules of supply and demand, and that those rules suggest that the declining share price is the result of an over supply of shares to the market (too many sells) and a lack of demand for the purchase of those shares at a certain price (not enough buys); and dropping the share price is the usual market mechanism of enticing buyers into the market. Various BB participants have given their own views as to why many shareholders are selling and why there is a need to drop the price to entice buyers (from TK / BOD trust issues to business operational issues). There are also those BB participants who say the situation is more complex than a straight forward application of the laws of supply and demand; that there is something more sinister going on with share price manipulation / possible share accumulation by say a potential buyer or an entity with significant means (not a Private Investor) who will ultimately benefit from the eventual sale of GKP. I have no doubt that there are shareholders selling because of GKPs operational performance / TK / BOD issues. I am also sure that those very same issues are putting off buyers (both PI and Institutional Investors) in the market. But I am also conscious that we are talking about oil here (a major global expensive commodity required in ever increasing amounts) that GKP have found in an extraordinary quantity; that it has been found in a region of political instability and where such quantity of oil (not just with GKP, but in the entire Kurd region) is a major political chess piece in the region (for Kurd financial independence) and worldwide (in terms of securing futures oil resources). I do not for one minute believe that those trading in the GKP shares are ONLY small time private investors spending their retirement fund / life savings. I think such a view would be naïve. I do think there are some BIG players at work here, but for obvious reasons, they wish to remain under the radar. The importance of GKP is such that I cannot see how GKP can be ignored (irrespective of any opinions of the personal qualities of TK / BOD and any perceived operational failings) However, this is only my personal opinion based on my life experience; I can provide no “evidence” to support my opinion, so there is no point in asking for it! So, back to the real purpose of this message - I do think it would be useful to remind ourselves of the issues that will come into play should an offer for GKP be made (whether it is considered low-ball or otherwise). Many moons ago I posted some details on take over voting. I think it might be useful to revisit that issue now. This is quite a long note, for which I apologise, but if you would like to understand the various voting thresholds, I do think it is worth taking the time to read. For those that do not have the time or inclination to read this full note, you can always read the summary of my conclusions set out below. Summary There would seem little point in making an offer for the shares of GKP unless the acquirer could obtain the necessary percentage of acceptance votes needed to “squeeze out” any dissenting minority and take total control of the company. In order for a take over of GKP to take place: (a) The KRG must have given consent in advance of the change of control of GKP (and that consent will, in my opinion, have to be sought / given before any offer is made public). (b) That if the offer was made as a straight forward offer for the shares, the offer would have to be so attractive that it would enable the acquirer to obtain the agreement to the terms of the offer from at least 90% of the holders of the shares in issue. (c) That if the acquisition was structured as an Amalgamation, it was supported by the majority of the GKP Board and was also approved by a MAJORITY of votes cast at a general meeting of the company. (d) That if the acquisition was structured as a Merger or a Scheme of Arrangement, there was a resolution passed by at least 75% of those voting at a shareholders’ meeting of the target company (note this is not 75% of all shareholders, but 75% of those voting at the meeting). That in taking into account the votes that could be cast at the meeting, regard would need to be had to any failure by a shareholder in complying with the disclosure provisions contained within the GKP Bye-Laws, which would render inoperative the voting rights attached to the shares held by them. KRG Consent The first matter I need to deal with is KRG consent. Clauses 39.7 and 45.2 of the PSC have the combined effect of requiring the KRG consent to any change of control of GKP otherwise the contract (the PSC) may be terminated, although the KRG must not unreasonably withhold consent. A take over of the company would give rise to a change of control. Would any acquirer wish to take the risk of the PSC being terminated for failing to obtain KRG consent? I don’t think so. Therefore, any bid (whether hostile to the company – e.g. the bid does not have the support of the GKP Board - or otherwise) will reasonably require the acknowledged KRG support before any bid is made public. Take Over Options AND The Requisite Voting Thresholds Under Bermuda law, there are a number of recognised legal mechanisms for acquiring or otherwise combining different companies, including amalgamation, take-over and scheme of arrangement. Also in December 2011 the Bermudan Companies Law was amended by providing an additional option of a merger. (a) The Offer to Purchase Shares Perhaps the most obvious way of mounting a takeover approach would be where a company (whether incorporated in Bermuda or not) makes an offer to the target company’s (GKP) shareholders to acquire all of their shares and, if necessary, utilising the powers under the Bermudan Companies Act to acquire any shares held by the target company’s dissenting shareholders not accepting an offer approved by a majority. The problem with any takeover structured as a straightforward offer for shares under Bermudan law (as in many other jurisdictions) is the considerable limits on what are often referred to as the “Squeeze Out” provisions (e.g. the compulsory acquisition of the shares held by the dissenting shareholders). Section 102(1) of the Bermudan Companies Act provides that where an offer is made by a company for shares (or any class of shares) in a Bermuda company and, within four months of the offer, the holders of NOT LESS THAN 90% of the shares which are the subject of that offer accept it, the bidder can, by notice, require the remaining shareholders to transfer their shares under the terms of the offer (this is a very broad summary of a quite complicated provision). So what is considered by some to be a low-ball offer is made – 90% of the shareholders must agree to that offer before the offer has the require effect. (b) The Amalgamation / The Merger An alternative approach to acquiring a target company under Bermudan laws is the amalgamation / merger (the concept of the merger was introduced in 2011, but is essentially the same in effect as the amalgamation save that with a merger there will be a surviving legal entity and a non-surviving legal entity – although you do not need to worry about this for the purpose of this note). I understand from my off-shore contacts that this is a popular method of structuring a corporate “takeover” since the “squeeze out” provisions are more generous under the Bermudan Companies Law. Unless the bye-laws of the target company or the acquisition vehicle provide otherwise, a resolution passed by at least 75% of those voting at a shareholders’ meeting of the target company, and the acquisition vehicle, is required to approve the amalgamation or merger (see Section 106(4A) of the Bermudan Companies Act 1981). However, this approval threshold is varied under the GKP Bye-Laws (at least in relation to amalgamations, since the Bye-Laws were written before the concept of the merger was introduced into Bermudan Law) and so the approval requirements are different as they apply to GKP. Bye-Law 165 states that “Any resolution proposed for consideration at any general meeting to approve the amalgamation of the Company with any other company, wherever incorporated, shall require the approval of 165.1 the Board, by resolution adopted by a majority of Directors then in office; AND 165.2 the Shareholders, by Resolution passed by a majority of votes cast at such meeting and the quorum for such meeting shall be that required in Bye-Law 60” namely two shareholders present in person or by proxy. Therefore, as far as shareholder approval is concerned, what is required is a resolution passed by a MAJORITY of votes cast at a general meeting of the company. The risk of a lowball offer going through would be whether it was possible to rally the support of sufficient dissenting shareholders in order to win any vote (against the amalgamation) at such a general meeting. The only comfort that I can take away from the provisions of Bye-Law 165 is the requirement that the amalgamation must also be approved by a majority of the board (and, under the provisions of the general law, those board members must act in accordance with the duty of care owed by them to the company). I believe the board is now constituted as follows: Todd Kozel (CEO/ Executive Director) John B. Gerstenlauer (Chief Operating Officer – Executive Director) Ewen Ainsworth (Finance Director – Executive Director) Simon Murray (Non-Executive Chairman) Lord Gutherie (Non-Executive Director) Mark Hanson (Non-Executive Director) Jeremy Asher (Non-Executive Director) John Bell (Non-Executive Director) Philip Dimmock (Non-Executive Director) Thomas Shull (Non-Executive Director) Andrew Simon (Non-Executive Director) So from the board of 11 members, at least 6 would need to approve the terms of any amalgamation – could this be an explanation for the appointment of the M&G4? In relation to a proposed merger (as opposed to an amalgamation), it would appear that the changes made to the Bermuda Companies Act 1981, by Bye-Law 165, would not apply, and so there would need to be a resolution passed by at least 75% of those voting at a shareholders’ meeting of the target company (note this is not 75% of all shareholders, but 75% of those voting at the meeting). This could be quite crucial when it comes to crunching the numbers. (c) The Scheme of Arrangement In this case, where an application is made by a company or any of its members, Section 99(1) of the Companies Act empowers the Supreme Court of Bermuda to order a members' meeting to consider a proposed arrangement or compromise between a company and its members (or any class of them). If the proposed scheme is then approved by a majority of the members (or class of members) in number representing at least 75% of the value of shares held by those members present and voting at the meeting (either in person or by proxy), the proposed scheme will be binding on the members (or class of members) and the company provided it is subsequently sanctioned by the court. So again, a Scheme of Arrangement could be put to the courts for approval if at least 75% of those shareholders present and voting at the meeting (either in person or by proxy) approve the proposed Scheme of Arrangement. Again, this is not 75% of all shareholders, but 75% of those voting at the meeting. This could be quite crucial when it comes to crunching the numbers. Take Over Voting – The GKP Bye Laws We know that at the 2011 AGM certain amendments were made to the GKP Bye-Laws that had the effect: of bringing into effect certain protections provided by the City Takeover Code by replicating certain provisions in the Company’s Bye-Laws. In particular, the Bye-Laws were amended so that shareholders are obliged to comply with notification and disclosure requirements equivalent to those set out in Chapter 5 of the DTR (Disclosure and Transparency Rules (as amended from time to time) of the UK Financial Services Authority Handbook). http://fshandbook.info/FS/html/handbook/DTR/5 Because GKP is a non-UK issuer, I understand that the reporting thresholds are 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% Under the provisions of the amended Bye-Laws, if GKP determines that a holder of shares has not complied with the notification and disclosure requirements with respect to some or all of such shares held by such holder of shares, GKP shall have the right (at the full discretion of the board) to serve a restriction notice on such person which notice shall (amongst other things) suspend the right of such person to vote those shares in person or by proxy at any meeting of GKP. Therefore, if any entity is “accumulating” shares in order to assisting with the making of a successful a take over bid for GKP, the voting rights of those shares could be rendered useless if there is a failure to make the appropriate reporting to GKP once the reporting thresholds have been breached. Clearly, if the board supports the bid of any potential acquirer who has failed to make the required disclosure, the board could waive the disclosure requirement and allow the voting rights to be retained. However, if the bid was not supported by the board, those voting rights could be withdrawn. Now, there has been discussions previously with regard to whether acquiring a significant quantity of shares and taking them out of any vote would assist an acquirer, and this is something I think it would be worth revisiting by looking at some figures, assuming it could be done in a mature manner! The Hostile Bid The example would be as follows: Company B has decided it would like to take control over target company A and is prepared to offer $X but the board of company A is not prepared to support the offer (although the offer would need to be put to the company shareholders, which could include the potential acquirer holding a significant number of the target company shares). As I have explained before, the first and perhaps the biggest problem with hostile bids is that the due diligence in a hostile bid situation is limited to information that is publicly available. Clearly the board of a target company in a takeover attempt that is not endorsed by the board, is not going to open its books for any due diligence inspection. The interesting point with GKP is that there is a raft of information available in the public domain which does suggest quite strongly that GKP is sitting on the mother of all oil finds and that valuations can be quite reasonably calculated based on the information in the public domain. However, is there enough of such information for an acquirer to make a speculative acquisition (speculative in the sense that a full due diligence exercise has not been carried out)? The Bye-Laws certainly seem to prevent a hostile “takeover” (e.g. a takeover not having the board’s approval) based on the amalgamation strategy or, in all other cases, make such a takeover a little more difficult based on the boards ability not reinstate voting rights in relation to shares acquisitions that have not been properly disclosed. Furthermore, even with the GKP board’s approval, there is significant possibility that a sufficient number of dissenting shareholders could frustrate any straightforward offer, amalgamation, merger or scheme of arrangement proposal at any general meeting should the terms of the proposal not be attractive. Conclusion I do not know the split of shares that are not in public hands, are held by PIs or held by Institutional investors, but I would suggest that the offer must be extremely attractive to gather the support of 90% of the shareholder base. It would certainly appear that the amalgamation approach is more favourable in terms of the “squeeze out” provisions (requiring only a majority of the votes of the shareholders for the amalgamation to be approved – and subject to the court approval) but such an approach also requires the backing of a majority of the directors in office, and so such a takeover strategy could only work with the backing of the majority of the board and the directors could only give their approval if such was consistent with their individual duty of care to the company. I hope this note helps investors to understand that there are certain difficulties with a lowball bid and that any bid that is made, would, in my view, need to be attractive to a considerable majority of those holding shares in GKP. LIL