NEW YORK (Feb. 2)
Arab businessmen have been busily conducting a series of ventures in this country aimed at buying into or buying out several large banks in Michigan and California. Their efforts were stymied in Pontiac, Michigan and San Jose. California, but an effort in Detroit appears to be having a measure of success. At the same time, southern Black Mayors have been quietly negotiating with Middle East oil officials and businessmen to develop programs of economic investment and cultural exchange.
In Pontiac, Ahmad C. Sarakbi, a Lebanese oil broker, has abandoned his effort to buy control of the Community National Bank because his backer, the New Jersey Teamster pension fund of Local 701 in North Brunswick, New Jersey, was withdrawing a $9 million loan commitment. Sarakbi said the backing evaporated because of a suit filed by the bank management charging him with securities violations. The bank obtained a temporary restraining order Jan. 15, but the order was lifted last week. The bank’s board of directors is continuing the suit, however.
In a statement, Sarakbi said he was returning about 270,000 shares in the bank that had been tendered to him. He had offered to buy 400,800 of the bank’s 800,000 shares for $21 each. In a defensive merger designed to block Sarakbi’s acquisition, the bank board signed an agreement Jan. 14 to sell to Security Bankcorp of Southgate. The withdrawal of Sarakbi’s offer was a defeat for Alfred Glancy III, who was trying to raise cash to help settle the estate of his father, Alfred Glancy Jr., a former owner of the Empire State Building.
REJECT ARAB CONTROL
Similarly, in San Jose, a 39-year-old Saudi Arabian financier, Adnan M. Khashoggi, has withdrawn his offer to buy a one-third interest in the First National Bank for $14.1 million. The withdrawal was reportedly due to the fact that stockholders in the bank would have rejected the Saudi Arabian’s bid in a vote that was scheduled Friday. Dissident stockholders had objected to allowing an Arab national to become the largest shareholder in a local bank. Khashoggi had sought to buy 650,000 shares of newly issued common stock at $21.83 a share.
The Saudi Arabian, who recently reported his personal wealth to be around $80 billion and head a business empire worth some $400 million, also has direct and indirect controlling interests through his and his two brothers Triad Holding Corporation in Chrysler and Fiat sales and servicing in Saudi Arabia, ownership of Kenworth trucks and Raytheon’s Mideast market business, and an agency relationship with Lockheed Aircraft. Triad Holding is a Luxembourg corporation.
BLACK MAYORS SEEK ARAB INVESTMENTS
In a related development, the Southern Conference of Black Mayors is seeking to attract Arab investments in industry and farming in southern towns and rural areas with local merchants marketing their products in Arab countries. Jay Cooper, Mayor of Prichard, Alabama, president of the 70-member Conference, said six mayors will travel to the Mideast in March or April to get the project underway Cooper said two New York foundations, which he did not identify, have indicated they might be interested in providing funds for the trip which will take them to Kuwait, Saudi Arabia and Iran.
Cooper expressed some concern that the trip would create some anxiety among Jews in this country which he hopes to avert by meeting with Jewish leaders. T.M. Alexander, a former official of the Department of Housing and Urban Development, who was hired last fall to negotiate with Arab leaders and raise money to pay the mayors’ travel expenses, said the project was “in no way political” or in any way an effort by the Black community to get involved “in any kind of political discord.”
Meanwhile, the Bank of the Commonwealth, one of Michigan’s biggest banks, announced Friday that a Saudi Arabian businessman had agreed to buy a substantial interest in the bank. James Barnes, Sr., chairman of the bank’s board, said Ghaith Pharaon, an American-educated Saudian with wide international interests, hoped to establish Detroit as a major center for trade between the Mideast and the U.S. “and generate a significant influx of investment capital for the bank.”
Barnes said a definitive agreement would be reached tomorrow and that Henry Ford II, president of the Ford Motor Co., would attend the meeting. The transaction must be approved by the Federal Deposit Insurance Corp. If it goes through, Pharaon will own 40 percent of the preferred stock and 32 percent of the bank’s common stock. Barnes also stated that Pharaon would buy 80 percent of the Barnes family’s preferred and common stock in the bank.
AUTO MAGNATE LOOKS FOR ARAB SUPPORT
In another development, Ford and Wayne S, Doran, coordinator of Ford’s $600 million Detroit riverfront development, the Renaissance Center, recently disclosed that they are seeking Arab support for the project which has soared in cost due to inflation. Doran told reporters that he and Ford are seeking additional funding at meetings in New York, Chicago and Los Angeles. They met with financial experts in New York earlier this month to get additional funding for the center, which will eventually include a 70-story hotel, four 40-story office buildings and apartments and shopping areas overlooking the Detroit River.