"The Con is On": How do you get something for nothing? Wael Al Mazeedi already showed us in BTU Power Company II how he got $ millions by putting himself on both sides of the "deal". Wael's latest attempt to replicate the "magic" with assets/money belonging to Qatar Investment Authority, Qatar National Bank, Dubai Islamic Bank, etc. Someone who "knows" describes the process...

Self-Dealing

• This, we believe, is the appropriate term for what Wael pulled-off in BTU Power Company II about 4 yrs ago.
• This, we believe, is also the appropriate term for what Wael was recently trying to pull-off in BTU Power Company. 

Background
As many readers of this blog already know from the petition filed by the Qatar Investment Authority to liquidate BTU Power Company (BPC), the owners of ALL the economic interests in BPC (QIA, Qatar National Bank, Dubai Islamic Bank, etc.) assert that Wael Al Mazeedi was trying to "pull a fast one on them" by appropriating THEIR assets into HIS company (QGEN Ltd.) and forcing them to get redeemed on Wael's "personal" terms.  [Note: we have obviously used our own terminology to describe Wael's wheeling and dealing.  The actual language used by QIA is included in the excerpts at the end of this post.]

Observation
Somebody posted a comment elsewhere in this blog that contained their personal synopsis of Wael's latest manifestation of his sole objective with regards to his "management" of other peoples' money: being a "Careful Steward":  [Note: obviously the following reflects the author's personal opinion.  Nonetheless, it appears tremendously plausible in light of what we know Qatar Investment Authority submitted to the Grand Court of the Cayman Islands.]

December 22, 2011 7:11 AM

The asset SWAP was always a CON. Wael wanted to "swap" value in TAPCO to Marubeni in exchange for their interest in CPC so "BTU" would lose all interest in TAPCO and control 100% of CPC.

Wael was then going to claim that he had "engineers" on his payroll and that he "operated" a facility. He could them implement his plan to save the world with his ground breaking hybrid designs.

All he need to save the world was the SWAP to occur.

Problem was that TAPCO is FAR more valuable than CPC and spins off way more cash. Wael was swapping out an interest in the most valuable asset, not too smart?

BUT.... He is crafty.

To make up for the value difference Marubeni was going to pay cash to BTU along with their stake in CPC. Wael was going to take the cash and "payoff" the existing BTU Power investors.

So, Wael trades TACPO for CPC and Cash.

The investors would get cash, a take it or leave it offer from Wael of about $50-60M. Investors get out with about half of their investment.

Wael, who owns nothing, would then be the owner of CPC through QGEN.

Deal was purely his way of getting something for nothing. Pure self-enrichment scheme on his part. He NEVER had the investors interest at heart.

A Careful Steward
Qatar Investment Authority's view of  Wael Al Mazeedi's "track-record" as a "careful steward" (WAM's own words) of their money (actually the money of the nation/people of Qatar)

"...Almazeedi... conducted the business of the Company in such a way that the rights and interests of ... the principal economic stakeholders in the Company — have been oppressed, disregarded and/or undermined such that it would be unjust and inequitable for them to be forced to remain as members in the Company or to be forcibly redeemed upon the terms proferred..."

"The Con is On..."

The Con
The following are "choice cuts" from the QIA petition.... Bon Appétit!

The Proposed Share Redemption and Asset Swap

• Furthermore, in or about July 2011, Almazeedi disclosed to the Preference Shareholders for the first time that the Company had apparently entered into an agreement to transfer certain assets of the Company (the "Proposed Asset Swap"). 
• The Proposed Asset Swap would involve an asset swap with Marubeni Corporation ("Marubeni"), a shareholder in both CPC and TAPCO, whereby the Company would purchase Marubeni's interest in CPC at the same time that Marubeni acquired all of the Company's interest in TAPCO, resulting in the entirety of the Company's capital] being invested and concentrated in one asset (CPC) in Tunisia. 
• Almazeedi did not previously disclose to the Petitioners that he was negotiating a transfer of the Company's assets, nor did he notify or consult with the Preference Holders Committee or the Investment Advisory Committee about the Proposed Asset Swap.

• Remarkably, Almazeedi has never sought approval from any of the Preference Shareholders regarding the Proposed Asset Swap and only disclosed the bare existence of the proposed transaction after apparently already executing an agreement to swap the assets and materially reconfigure the Company's investments. Furthermore, the Company has refused to provide the Petitioners or any of the other Preference Shareholders with the underlying transaction documents or any other relevant information regarding the Proposed Asset Swap.
• In any event, there is no evidence that the Proposed Asset Swap is in the best interests of the Company or the Preference Shareholders. Instead, it appears to have been proposed to benefit the Manager to the detriment of the Preference Shareholders' interests in the Company:
• ...Almazeedi faces an intractable conflict of interest to the extent he is pursuing the Proposed Asset Swap in order to force the Preference Shareholders into the Proposed Share Redemption and a transaction with QGEN, a company that he owns or controls. Almazeedi did not obtain an independent valuation of the Proposed Share Redemption and did not seek the approval of the Preference Shareholders with respect to the Proposed Asset Swap. It appears that Almazeedi is not pursuing the transactions in the best interests of the Company and/or its Preference Shareholders, but rather seeking to materially benefit himself with respect to the proposed QGEN transaction.
• The Petitioners understand that Almazeedi and/or his affiliates have recently been engaged in an arbitration dispute with Marubeni. It is critical to determine if the consideration in the Proposed Asset Swap bears any relation to the settlement of that dispute. For example, the Petitioners understand that the Proposed Asset Swap apparently includes an unexplained US$4m transaction fee to be paid to Marubeni. As Almazeedi has refused to allow the Preference Shareholders to review the contracts relating to the Proposed Asset Swap, the Petitioners have been unable to properly assess this issue.
• Despite the numerous deficiencies with the Proposed Asset Swap, the Petitioners believe that the Company is seeking to consummate the transaction in the near future. Such an outcome is likely to seriously prejudice the interests of the Preference Shareholders and have a detrimental impact on the value of the Company's investments, and further highlights the urgent need for the relief sought in this Petition.

PS

Marubeni, wake up.  Wael's "smoke and mirrors" transaction with regards to the money of QIA, QNB, DIB, etc. reeks.  The foul odor you smell means there is something very, very wrong with the whole thing (particularly given that someone is seemingly getting "paid-off" to the tune of USD 4 million).