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Kurdistan minister’s secret £13m oil
profit
21.2.2010
By Jon Ungoed-Thomas
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February 21, 2010
LONDON, —
A British businessman who oversees oil contracts in
Iraq has made more than £13m by secretly trading
shares in a UK company that had struck oil in the
country.
Ashti Hawrami, 61, invested in Heritage Oil after he
gave it a contract to look for oil in northern Iraq.
He sold the shares after it struck oil in March last
year.
The Financial Services Authority (FSA), the City
regulator, is believed to be investigating Hawrami’s
deals and whether he exploited his privileged
position.
Hawrami, a minister for the Kurdistan regional
government (KRG), says the transactions were
authorised and profits were correctly transferred to
the government. |
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He acknowledges his
superior knowledge of the “oil prospects” of the
region, but says he did not breach insider trading
laws.
The disclosures will prompt scrutiny over share
dealings in oil companies in Iraq. Last week Mehmet
Sepil, a Turkish oil executive, was fined nearly £1m
by the FSA for insider trading in Heritage Oil.
“An oil minister in Iraq quite clearly shouldn’t be
making millions of pounds of profits secretly buying
and selling shares on the London Stock Exchange in
one of the oil companies he oversees,” said one
industry source. “He should disclose what he knew
about the chances of this firm striking oil and
when.”
Hawrami built up his fortune as an oil consultant
and owns a mansion near Henley-on-Thames,
Oxfordshire. He returns to England about once a
month.
The businessman joined the KRG in 2006. He is
credited with making a series of deals with foreign
oil companies, including Heritage Oil, that have put
Kurdistan on the world energy map.
Hawrami bought the shares in Heritage in autumn 2008
for £12,095,850 as it looked for oil in Kurdistan.
He started selling them five days after the company
announced that it had struck oil,www.ekurd.netthe
shares were sold for £25,070,709. The oil minister
says the deals were authorised by his government but
he used nominee accounts at HSBC in London because
he considered public disclosure might be
embarrassing.
In a separate deal Hawrami bought shares in the oil
group DNO, listed on the Oslo stock exchange. It had
also been awarded a contract in Kurdistan. He made a
profit of more than £10m on the shares.
Hawrami said he originally bought shares in DNO to
provide the company with financial support. He
claims he bought the shares in Heritage to hedge his
bets if the value of DNO stock fell. He says he made
no personal gain from the profits.
Last week the KRG said it had authorised all of
Hawrami’s transactions and was satisfied that he had
not acted on any market-sensitive information. It
released all details of Hawrami’s London deals and
said all the profits had been accounted for.
The KRG said: “The fact that the minister, like any
government official, would have a better view of the
oil prospects of the Kurdistan region than the
general public was not considered to be insider
dealing by the KRG.”
The FSA said it was unable to confirm or deny if
Hawrami was under investigation.
Copyright, respective
author or news agency, The Sunday Times | Timesonline
co.uk
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