Mubarak sons took $250m fee for Israel gas contract

Kuwaiti daily "Al-Jarida" reports that Gamal and Alaa Mubarak received commissions on the EMG-IEC contract.

Kuwaiti daily "Al-Jarida" reports that Gamal and Alaa Mubarak, the two sons of former Egyptian President Hosni Mubarak, received a hefty commission from Israel to back natural gas exports to Israel. The paper cites what it calls "classified documents" from a special department of Egypt's Ministry of the Interior that was set up following the uprising to examine the Mubarak family's interests.

"Al-Jarida" says that the negotiations took place in January 2005 between Israeli officials, former Egyptian Oil Minister Sameh Fahmi, and East Mediterranean Gas Company (EMG) shareholder Hussein Salem, an associate of Hosni Mubarak. The paper claims that Gamal Mubarak received a 5% commission and that Alaa and Salem each received 2.5%, of the 2.5 billion Egyptian pound contract, which was signed in May 2005.

"Globes" calculates that commissions to the two sons from the $3.3 billion contract amount to $250 million. The contract was later increased to $6 billion, and Egypt increased the price for the natural gas by 49%.

Under the contract, EMG will supply Israel Electric Corporation (IEC) (TASE: ELEC.B22) with 1.7 billion cubic meters of natural gas a year over 15 years. Deliveries began in February 2008, after a pipeline from the gas fields offshore from El Arish in Sinai to Israel was completed. Deliveries halted in February 5, after an attack on the pipeline to Jordan.

In December Israel Corporation (TASE: ILCO) subsidiaries signed a 20-year €7.4 billion gas delivery contract with EMG.

Hussein Salem owns 28% of EMG, Egyptian Natural Gas Holding Company owns 10%, Thai energy giant PTT Public Co. Ltd. owns 25%, Yosef Maiman owns 20.6% through Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) and his private company Merhav MNF Ltd., and Israeli institutional investors own 4.4%.

Published by Globes [online], Israel business news - www.globes-online.com - on March 6, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

5 Comments
View comments in rows
Update by email about comments talkback
POST
Comments
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018