The Bin Laden story

The Bin Laden story

There are scale models of the Islamic holy cities of Mecca and Medina in the reception of Saudi Binladin Group, one of the world’s largest contractors. “They are absolutely stunning,” says one UK consultant who has visited the group’s headquarters in Jeddah, Saudi Arabia. The consultant describes SBG as “the Balfour Beatty of the Middle East”. However, this family-owned company has faced one major problem that its British counterpart is unlikely to experience: one family member is Osama bin Laden, the world’s most wanted terrorist.

Guilt by association

Bakr bin Laden, Osama’s half-brother and the group’s chairman and chief executive, publicly disowned Osama and his cause in 1994. Nevertheless, the historical links between Osama and SBG have continued to cause problems,

even though the business goes by the “Binladin” rather than “bin Laden” transcription of its name. Osama made his fortune as a shareholder of the company his father, Mohammed, founded in 1931. And he gave an interview to news agency Al-Jazeera in 1999 in which he mentioned that his father had been lucky enough to pray at the mosques of Mecca, Medina and Jerusalem, the three holiest cities in Islam, all on the same day because of his construction company’s work in the three cities.

After 9/11, the bin Laden name evoked revulsion in much of the world. There was never any evidence linking the firm with the attack, but the western media and conspiracy theorists began looking for it anyway – one notably hysterical investigation centred on the expiration of SBG’s website domain name in September 2001. The net result was that Western companies shied away from doing business with the bin Ladens – Cadbury Schweppes and Unilever severed distribution deals that they had with one of the group’s subsidiaries, although they said that the decisions were parts of wider reviews.

Three years later, however, and the story could hardly be more different.

The retreat

The company and the Binladin brand had, through no fault of its own, suffered a public relations disaster of epic proportions. There was speculation in the media and from PR experts that SBG would have to change its name; Abdellatif Khemakhem, an SBG adviser, recently denied that this was ever a realistic option. However, the company’s prospects looked bleak and within two months it had approached several public relations firms about improving its image, including London agency WMC Communications. WMC’s American clients told the PR firm that they did not want it to get involved with the Saudi Binladin Group. WMC’s strategy would have included a website for the group detailing its activities so that it would appear an open organisation.

Instead, SBG decided to retreat, retrench and regroup. Omar Saeed, who covers the Saudi Arabian construction market from the British consulate-general in Jeddah, said the company returned to its heavily fortified core markets. It is believed to have cut its workforce from 23,000 to 18,000, and focused on Saudi Arabia. Its name would not be a problem there – the group had worked for the House of Saud for half a century and Osama’s father had been a close confidant of the royal family. It concentrated on the Saudi market for at least a year.

During that time, the bin Ladens took the opportunity to rebalance their business, concentrating on its strengths. Saeed says:

“They are most known for their construction and building work. They cut back sectors such as healthcare, realising that there were better-qualified companies to do that work.” A Saudi Binladin Group source confirms that its healthcare work has been scaled back and is now only a minor element of its business.

Victory

Obviously after 9/11 the bin Laden name didn't go down very well. But people soon realised that it didn't have anything to do with the construction company

In 2002, SBG went on the attack. It put adverts in newspapers such as the Saudi Gazette and the Arab Gazette. “They made it clear in the press that they had nothing to do with Osama,” says Saeed. The move paid off, with the consulate receiving increased numbers of calls from British companies interested in talking to the group, or at least selling it equipment and software.

Gradually, whatever concerns or squeamishness clients may have had about dealing with the Binladin brand melted away. A British consultant says: “Obviously, after 9/11, the name didn’t go down very well. Everybody was talking about it, but people soon realised that it didn’t have anything to do with the construction company.”

Talking about SBG’s present situation, Yahia Yehia, international relations manager for Bakr bin Laden, says business could scarcely be better. “We’re expanding tremendously,” he says. And Atef Mourad, operations vice-president of SBG subsidiary Arabian BEMCO, adds: “Work is very good. We are working in power and industrial-type projects.” One SBG employee in the United Arab Emirates says the firm has started to pitch for more contracts in Dubai and Egypt.

SBG is bidding for major projects in partnership with western firms – in Dubai it teamed up with German group Siemens for the £850m first phase of the city’s light rail transport project. And it is bidding for Cairo Airport Terminal 3 with American contractor Turner International. This signals SBG’s success – Turner presents an image of proud patriotism, with an American flag and the words “Turner supports and salutes our American heroes in the military” emblazoned on its website. As one rival firm puts it: “Two years ago, [western] firms would not have partnered with SBG. Everybody was a bit paranoid. Now when the name is mentioned, everybody smiles – but in the UK you have to explain that the company has no link with Osama.”

Not all UK firms are shy about working with SBG. It does £35-40m of trade a year with UK firms and was due to work with engineering consultant High-Point Rendel if it had won a port job in Saudi Arabia last year. It has registered with British Trade International, which is sponsored by the DTI and the Foreign & Commonwealth Office, to set up links with British firms. On current estimates, 78 UK companies have regular dealings with Saudi Binladin Group, such as architect Areen Design Services and many materials and equipment makers.

Westerners may now be more content to work with the group, but in some ways their influence on its successful recovery was perhaps less than that of the Middle Eastern market. A source at a company that has worked with SBG says that it has become too expensive for overseas businesses to run projects in the Middle East – there are a quarter of the number of western firms working in the region than when he arrived 16 years ago. He adds that while westerners might read badly into the Binladin name, Middle Eastern firms are aware enough of the family’s history to know “it is only one bad egg and you don’t throw out the good eggs”. In short, an initial backlash in the Middle East against SBG after 9/11 was never likely to last among the region’s clients.

Today

SBG has rebuilt its reputation through aggressive marketing and firms now accept it is not a PR disaster to work with it. In the next five years it has publicly stated that its transport business is likely to grow as well as power generation schemes. The refocusing of its business has made it even more competitive in these arenas.

But the problem has not totally disappeared. Earlier this year, it was headline news in UK newspapers that SBG was on an initial shortlist for the Burj Dubai, which at 705 m is to be the world’s tallest tower or, as The Guardian put it, “almost twice the height of the World Trade Centre destroyed by supporters of the family’s renegade offspring in September 2001”. As it happens, SBG did not even make the final shortlist of the client, developer Emaar Properties. Yet in Western eyes, it appears that it is still not completely out of the dark shadow caused by that renegade, outcast offspring.

Saudi Binladin Group in the UK

The late summer sun beats down on the leafy Surrey town of Kingston-on-Thames. I walk up the short driveway and knock on the door. A middle-aged woman opens it. I explain that I am here to see her husband, Thomas Cowking. I have been unable to find his phone number, but I have his address, so a personal visit seems to be the only way to make contact.

He isn’t in. Mrs Cowking takes my business card and politely tells me: “I can’t guarantee he’ll want to talk to you. You aren’t the first journalist to try to contact him.” I trudge off, my journey wasted. Around the corner, a billboard advertises a computer game in which players try to hunt down Osama bin Laden.

Its principle activity is international marketing, public relations and administrative services

SBG (UK) accounts statement

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Thomas Leonard Cowking is a director of several of Saudi Binladin Group’s UK subsidiaries (see chart, right), including what seems to be its main business here, SBG (UK). Building wants to talk to Cowking and a fellow director of several SBG subsidiaries in the UK to assess the image problems the businesses have suffered. They may be difficult to get hold of, but the companies’ records are not. According to Companies House, SBG (UK) made a turnover of about £148,000 in 2002, up £27,000 on the previous 12 months. The accounts of SBG (UK) state: “The principal activity of the company throughout the year was the provision of international marketing, public relations and administrative services to Saudi Binladin Group.”

Although the UK-based subsidiary has increased its turnover, SBG appears to have scaled down its activities in the UK since 9/11. Towards the end of 2002, it sold its property in Mayfair’s Berkeley Square, a commercial building in which it also had its offices. Following the sale, the bases of these businesses have not been made public, and they are instead registered at the London office of its auditor, Kingston Smith. Kingston Smith declined to comment on the activities of its client.

At least one subsidiary has been dissolved after consolidation. SBG Financial Engineers, of which bin Laden family member and parent group shareholder Saleh was a director, was bought by SBG (UK) on 31 October 2002 for the cost of its liabilities at that date. Financial Engineers provided financial services and research to SBG. Its performance declined markedly in 2002, with the 10 months to 31 October yielding less than £56,000 in turnover, down from nearly £220,000 over the previous 12 months.

Financial Engineers’ other director was Akberali Moawalla, a 55-year-old Tanzanian who lives in Surrey. Like Cowking, he appears as a director on several subsidiaries. One of these is Globe Administration, the immediate parent of which is Islay Holdings. Islay’s accounts are unobtainable as it is based in the Cayman Islands, but SBG UK’s accounts confirms it is “a related company”.

The company secretary of Globe Administration – as well as its immediate subsidiary, Symphony Advisers, of which another bin Laden, Shafig, is a director – is the Honourable Mark Bridges. He is a partner at London law firm Farrer & Co, and he has been the Queen’s personal solicitor since mid-2002. Shortly after the 9/11 attacks, Bridges was quoted as saying he was a longstanding friend of the bin Laden family and emphasised that it was no longer linked to Osama.

Bridges’ involvement in the companies arose from a service that Farrer & Co set up in the 1980s. The practice opened a series of firms called Tyrolese, each with a different serial number. Farrer’s international clients wanting to acquire a UK base can buy one of these. Saudi Binladin Group and Islay Holdings did this, and then renamed them. James Thorne, a solicitor at Farrer and company secretary of Tyrolese (Directors), a type of holding company, says: “This is not a money spinner for us; we do not charge a big fee. Any client can use the service – often they change the name to something more appropriate.”

Saudi Binladin Group is an important client for Farrer as the law firm has also acted for the group on the sale of its London properties. And Bridges’ colleague at Farrer, Alison Springett, also acts as company secretary for SBG (UK).

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Having failed in my attempt to contact Cowking, the next stop is the outskirts of Woking in Surrey, with its private roads and mock-Tudor houses. Outside Akberali Moawalla’s house sit three expensive cars, each with a personalised number plate. One has a learner’s plate.

Moawalla’s son comes to the door. He looks into a room to his right: “It’s a journalist. Do you want to speak to him?” No sound emanates from the room, but Moawalla has clearly indicated his desire not to speak to the press. I again leave my business card, but do not expect to be called back.

A few minutes later as I trudge down one of the country lanes, the car with the L-plate speeds past me. I suspect that the reason Moawalla does not want to talk to me has little to do with giving his son a driving lesson.

The attempts to talk to Moawalla and Cowking have proved fruitless, and, just as frustratingly, Springett has declined to comment while Bridges is on leave until October. Saudi Binladin Group has evidently dealt with the problem its name creates and in the Middle East is able to work openly. But in the UK where the name of the family’s outcast brother still inspires virtual hysteria, it seems that the group is determined to maintain a low profile.