Wednesday, March 30, 2011
Moroccans Protest King's 2 Billion Dollar Investment Fund
Here is an article from Bloomberg Businessweek about King M6's 2 Billion Dollar Investment Fund and his controlling shares in Moroccan markets. Such dominating economic power could be seen as a conflict of interests for the ruler of a country.
Moroccans Protest Monarch’s $2 Billion Fund as Democracy Barrier
March 24, 2011, 12:44 AM EDT
By Gregory Viscusi and Aida Alami
March 24 (Bloomberg) -- When tens of thousands of Moroccans took to the streets nationwide on March 20, their chanted demands echoed those of citizens across the Arab world: freer elections, greater civil liberties and less corruption.
Except they were also protesting an investment fund.
SNI, with assets worth at least $2 billion, is controlled by Morocco’s King Mohammed VI and managed by Mohamed Mounir Al Majidi, the king’s private secretary, who has business interests of his own. The 47-year-old monarch holds stakes in banking, insurance, dairy, sugar and cooking-oil companies; his advisers are involved in ventures from consulting to advertising.
For protesters, SNI’s web of interests highlights the flaw in the king’s March 9 promise pledge to put Morocco on the path to becoming the Arab world’s first constitutional monarchy. Unless the influence wielded by Mohammed VI and his advisers is weakened, his promises will ring hollow, they say.
“You can’t have fair competition when the people with power descend into the souk,” said Abdelilah Benkirane, leader of the Justice and Development Party, an Islamist party modeled on Turkey’s AKP. “That has to end.”
“SNI Out” and “Majidi Go Away,” read banners held by demonstrators in many of the 53 cities that saw protests.
The popular movements that ousted Tunisian President Zine El Abidine Ben Ali and Egyptian President Hosni Mubarak have spread to Morocco, though with a difference. The crowds have been smaller and peaceful. Police have kept their distance. Moroccan protesters are demanding greater democracy and an end to corruption, not a change in regime.
The best way to reduce the king’s hold over the economy is to pressure him to go through with the constitutional changes he’s promised, Benkirane said. The ruling family has reigned since the 17th century, and Mohammed VI’s grandfather led the liberation struggle that ended the French protectorate in 1956.
“A political person can’t also be an economic actor,” said Chakir Aboubakir, a 28-year-old freelance salesman and business student involved with February 20, a Facebook-based movement that organized protests on that day and again on March 20. “He has to choose.”
Mohammed VI has already loosened freedom of speech since becoming king in 1999, even setting up an Equity and Reconciliation Commission in 2004. It investigated thousands of victims of disappearances and arbitrary detentions under Mohammed VI’s father, King Hassan II.
The constitutional changes, to be drawn by a commission by June, will be put to a referendum in this country of 32 million.
During three days last week, unemployed university graduates gathered outside the parliament in Rabat to demand jobs, teachers camped outside the Education Ministry protesting low wages, retired bus drivers in Casablanca demanded back pension payments outside the city courthouse and members of February 20 met at the headquarters of an opposition party to debate strategy. Police were barely in sight.
Among the 17 Arab countries, only Kuwait and Lebanon were freer than Morocco, according to last year’s annual rankings by Washington-based Freedom House.
“The monarchy is not contested,” said Omar Radi, a 25- year old economist and also a member of the February 20 group. “Other countries haven’t had the opening we’ve had since 2000. He’s let some pressure off.”
SNI, which has no website and operates from an unmarked Casablanca office building, was listed on the Casablanca stock market until August 2010, when it merged with its subsidiary Omnium Nord Africain and bought back its outstanding shares in a $3.9-billion offer.
In 2009, its last full year as a quoted company, SNI reported revenue of 3.4 billion dirhams ($430 million) and stock market holdings valued at 17.4 billion. ONA and SNI accounted for 11.7 percent of the Casablanca market’s 509 billion dirham market capitalization at end of 2009, according to figures in the bourse’s annual report.
According to the website of Bourse de Casablanca, the country’s main stock market, SNI combined owns 48.3 percent of Attijariwafa Bank, the country’s largest publicly traded bank; 79 percent of Wafa Assurance, the largest traded insurer; 63.4 percent of Centrale Laitiere, its largest dairy; 75.8 percent of Lesieur Cristal, its largest maker of cooking oils; and 63.5 percent of Cosumar, the largest sugar refiner.
Steel and Sugar
It controls 65 percent of steelmaker Sonasid through a joint venture with ArcelorMittal set up in 2006. Lafarge Maroc, the country’s largest producer of building materials, is in a 50-50 venture with Paris-based Lafarge SA.
At the time of the merger, SNI said it would sell its stakes in Cosumar, Lesieur Cristal and Centrale Laitiere, which is has yet to do. Shares of Cosumar and Centrale Laitier are both up 10 percent since the beginning of the year, making them the ninth- and 10th-best performers on Casablanca’s benchmark Madex index.
The index is unchanged since the start of the year, while the Dow Jones Arabia Titans 50 Index is down 9 percent. Its 10th-best performer: Attijariwafa Bank, up 0.4 percent.
SNI didn’t respond to phone and e-mail requests for comment. A receptionist at the unmarked SNI office space in an Attijariwafa office building in Casablanca’s business district said no documentation was available. Communications Minister Khalid Naciri didn’t return phone and e-mail messages.
“Institutions such as the royal family’s holding company, Omnium Nord Africaine (ONA), which now clears most large (property) development projects, regularly coerce developers into granting beneficial rights to ONA,” said a U.S. diplomatic cable written in December 2009 by Casablanca consul general Elisabeth Millard and released by Wikileaks.
The king’s advisers are involved in the economy as well. Fouad El Himma, the former deputy minister of interior who now heads the Party of Authenticity and Modernity, owns Cabinet Mena Media Consulting, said Rachid Filali Meknassi, secretary-general of Transparency Maroc, a Rabat-based organization linked to Transparency International. Majidi, the private secretary, owns FC Communication, the country’s largest outdoor advertising company, Filali said.
“Once there is a real parliament and government in place, then the real battle against the Makhzen can begin,” said Azzedine Layachi, a political science professor at St. John’s University in New York. He was using a Moroccan term that means the “warehouse” and refers to the royal advisers, business leaders and top bureaucrats who hold power behind the scenes.
In his 11-minute speech on March 9, seated between his seven-year old son and his 40-year old brother, the king said he would strengthen the powers of the prime minister, who will come from an elected political party, and promote free and fair elections. Regional councils also are to be elected.
The king didn’t mention abolishing the constitution’s Article 19, which has been interpreted to give him full powers, and he’ll choose the members of the commission himself -- ignoring two demands of the February 20 movement.
Karim Tazi, the former head of the Moroccan Textile Industry Federation, the country’s largest industrial employer, said the state-run media’s derision of the February 20 movement and the king’s power over the economy are worrying signs.
“There’s clearly pride on the side of the king, that he wants to do it at his own rhythm and not be rushed by the street,” Tazi said. “The risk is that by not listening, the palace will radicalize the movement.”
--Editors: Anne Swardson, John Fraher