Yousef Beidas
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Yousef Beidas ( ar, يوسف بيدس, also transliterated Yusif Bedas, Yusef Baydas, Yousif Beydas) (December 1912 - 28 November 1968) was a banker born to a
Palestinian Palestinians ( ar, الفلسطينيون, ; he, פָלַסְטִינִים, ) or Palestinian people ( ar, الشعب الفلسطيني, label=none, ), also referred to as Palestinian Arabs ( ar, الفلسطينيين العرب, label=non ...
father and a Lebanese Beirut-born mother. Known as "The Genius from Jerusalem" and the founder and Chairman of
Intra Bank Intra Bank (also known as Banque Intra or بنك انترا) was a Lebanese bank, and the largest financial institution in Lebanon until its collapse in 1966. Foundation and rise of the bank The bank was founded in 1951 by Yousef Beidas and t ...
headquartered in
Lebanon Lebanon ( , ar, لُبْنَان, translit=lubnān, ), officially the Republic of Lebanon () or the Lebanese Republic, is a country in Western Asia. It is located between Syria to the north and east and Israel to the south, while Cyprus lie ...
, he was a central figure in one of the Middle East's financial success stories and later one of its most disastrous financial collapses. Until his final days, Beidas claimed he was victim of 'a well-planned conspiracy'.


Early life

Born in
Jerusalem Jerusalem (; he, יְרוּשָׁלַיִם ; ar, القُدس ) (combining the Biblical and common usage Arabic names); grc, Ἱερουσαλήμ/Ἰεροσόλυμα, Hierousalḗm/Hierosóluma; hy, Երուսաղեմ, Erusałēm. i ...
,
Palestine (region) Palestine ( el, Παλαιστίνη, ; la, Palaestina; ar, فلسطين, , , ; he, פלשתינה, ) is a geographic region in Western Asia. It is usually considered to include Israel and the State of Palestine (i.e. West Bank and Gaz ...
under Ottoman rule, Beidas was the son of
Palestinian Palestinians ( ar, الفلسطينيون, ; he, פָלַסְטִינִים, ) or Palestinian people ( ar, الشعب الفلسطيني, label=none, ), also referred to as Palestinian Arabs ( ar, الفلسطينيين العرب, label=non ...
author and scholar
Khalil Beidas Khalil Beidas ( ar, خليل بيدس, also transliterated Khalil Bedas, Khalil Baydas, Khalil Beydas) (1874–1949), was a Palestinian scholar, educator, translator and novelist. Beidas was the father of Palestinian Lebanese banker Yousef Beida ...
and a Lebanese mother. In Mandatory Palestine he enjoyed a brilliant and precocious career. He was appointed the director of the exchange section of the Palestinian branch of
Barclay's Bank Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services. Barclays traces ...
at 21 years of age, and rose to be manager of the
Arab Bank Arab Bank is one of the largest financial institutions in the Middle East, founded in 1930 in Jerusalem, Mandatory Palestine, as the first private sector financial institution in the Arab world. Headquartered today in Amman, Jordan, it serves cl ...
by the end of World War 2. Having fled Palestine in 1948 with his pregnant wife, the Lebanese Wedad (Salameh) Abou Fadel, whom he married in 1946, was granted the Lebanese passport on account of his Lebanese Beirut-born mother. One of the outcomes of the Israeli-Arab war in Palestine in 1948, and the concomitant flight of huge numbers of Palestinians, was that
Haifa Haifa ( he, חֵיפָה ' ; ar, حَيْفَا ') is the third-largest city in Israel—after Jerusalem and Tel Aviv—with a population of in . The city of Haifa forms part of the Haifa metropolitan area, the third-most populous metropol ...
lost its status as the commercial centre of the
Mashriq The Mashriq ( ar, ٱلْمَشْرِق), sometimes spelled Mashreq or Mashrek, is a term used by Arabs to refer to the eastern part of the Arab world, located in Western Asia and eastern North Africa. Poetically the "Place of Sunrise", th ...
or Arab countries east of Egypt, and the role was picked up by Beirut. Lebanese traders were happy to lay out the red carpet for people they otherwise regarded as "two -bit Palestinians" for the capital and talent that could bring to the local economy. Beidas set himself up as a money-changer in Beirut with a personal capital of $4,000. On one occasion he even rented all of his office furniture, leaving only a sitting area on the floor for himself to conduct his business, and eventually managed to put 100 competitors out of business.


Intra Bank

Beidas established his Intra (International traders) Bank in 1951, together with three partners,
Mounir Abou Fadel Mounir Abou Fadel (Arabic: منير أبو فاضل) (June 5, 1912 – January 29, 1987) was a Lebanese Greek Orthodox politician. He was a member of the Lebanese Parliament for thirty consecutive years (1957-1987) representing the dist ...
, Emile Mousallam and Mounir Haddad, with a capital of 12,000.LL Lebanese pounds, according to one source, or £100,000 sterling based on borrowings from his old clients at the Arab Bank. At the time, Beirut's financial importance was enhanced in the wake of the Tripartite Aggression against Egypt in 1956, which weakened Cairo's function as a beachhead for European investment in the Arab world, the tight
bank secrecy Banking secrecy, alternately known as financial privacy, banking discretion, or bank safety,Guex (2000), p. 240 is a conditional agreement between a bank and its clients that all foregoing activities remain secure, confidential, and private. Mo ...
rules and absence of
exchange controls Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents, on the purchase/sale of local currency by nonresidents, or the transfers of any currency across national bor ...
in the Lebanese banking system made the country a refuge for
capital flight Capital flight, in economics, occurs when assets or money rapidly flow out of a country, due to an event of economic consequence or as the result of a political event such as regime change or economic globalization. Such events could be an increa ...
, petrodollars and
hot money In economics, hot money is the flow of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts. These speculative capital flows are called "hot money" b ...
from
Arab states of the Persian Gulf The Arab states of the Persian Gulf refers to a group of Arab states which border the Persian Gulf. There are seven member states of the Arab League in the region: Bahrain, Kuwait, Iraq, Oman, Qatar, Saudi Arabia, and the United Arab Emir ...
. Intra was soon to become the dominant player in the Lebanese economy, and by 1966 it had between 13 and 17 percent of the country's bank deposits and assets which included the
Casino du Liban Casino du Liban is a casino located in Maameltein, in Lebanon and is 22 km north of Beirut. With an area of about 35,000 square meters, the casino has around 400 slot machines and 60 gaming tables. It has a showroom, night club, theater, b ...
, the largest casino in the world, through which drug money was reportedly recycled,
Middle East Airlines Middle East Airlines – Air Liban S.A.L. ( ar, طيران الشرق الأوسط ـ الخطوط الجوية اللبنانية ''Ṭayyarān al-Sharq al-Awsaṭ – al-Khuṭūṭ al-jawiyyah al-lubnāniyyah''), more commonly known as Middle ...
and the Port Authority of Beirut. He turned Middle east Airlines, floundering at the time, into one of the most profitable airlines in the world. he owned a steel mill and a mutual fund society. His group also had an extensive repository of real estate holdings in major cities, 40 branches across the globe, prime property investments in a 27-story skyscraper on
Fifth Avenue Fifth Avenue is a major and prominent thoroughfare in the borough of Manhattan in New York City. It stretches north from Washington Square Park in Greenwich Village to West 143rd Street in Harlem. It is one of the most expensive shopping ...
in New York near the
Rockefeller Center Rockefeller Center is a large complex consisting of 19 commercial buildings covering between 48th Street and 51st Street in Midtown Manhattan, New York City. The 14 original Art Deco buildings, commissioned by the Rockefeller family, span th ...
, Beidas's bank also controlled a shipyard in Marseille, the Londonderry Hotel in
Park Lane Park Lane is a dual carriageway road in the City of Westminster in Central London. It is part of the London Inner Ring Road and runs from Hyde Park Corner in the south to Marble Arch in the north. It separates Hyde Park to the west from ...
and a section of the
Champs-Élysées The Avenue des Champs-Élysées (, ; ) is an avenue in the 8th arrondissement of Paris, France, long and wide, running between the Place de la Concorde in the east and the Place Charles de Gaulle in the west, where the Arc de Triomphe is l ...
. He also opened up a cinema production company "Studio Baalbek" in 1956, hoping to make Lebanon the "Hollywood of the Middle East". Beidas' rise to a key player in Lebanon's economy aroused business enmities among the country's elites, for whom banking was a traditional and closed family-based monopoly. They resented the fact that a Palestinian interloper had assumed control over central parts of the national infrastructure. Beidas used part of his capital, furthermore, to finance the PLO's
Fatah Fatah ( ar, فتح '), formerly the Palestinian National Liberation Movement, is a Palestinian nationalist social democratic political party and the largest faction of the confederated multi-party Palestine Liberation Organization (PLO) and s ...
, which was becoming the political and military arm of the
Palestinian diaspora The Palestinian diaspora ( ar, الشتات الفلسطيني, ''al-shatat al-filastini''), part of the wider Arab diaspora, are Palestinian people living outside the region of Palestine. History Palestinian individuals have a long history of ...
. As early as 1962 (16 April) the then President of Lebanon, the
Maronite The Maronites ( ar, الموارنة; syr, ܡܖ̈ܘܢܝܐ) are a Christian ethnoreligious group native to the Eastern Mediterranean and Levant region of the Middle East, whose members traditionally belong to the Maronite Church, with the lar ...
Fuad Chehab Fouad Abdullah Chehab ( ar, فُؤادْ عبد الله شِهاب; 19 March 1902 – 25 April 1973) was a Lebanese general and statesman who served as President of Lebanon from 1958 to 1964. He is considered to be the founder of the Lebanese ...
, concerned about what he perceived to be the 'obscure powers' of international finance extending, though Beidas's companies, their tentacles into the Lebanese economy, sounded out General Pierre Rondot about the possibility of fighting against Beidas's interests in order to weaken his influence.
Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the Ara ...
's
Faisal of Saudi Arabia Faisal bin Abdulaziz Al Saud ( ar, فيصل بن عبدالعزيز آل سعود ''Fayṣal ibn ʿAbd al ʿAzīz Āl Suʿūd'', Najdi Arabic pronunciation: ; 14 April 1906 – 25 March 1975) was a Saudi Arabian statesman and diplomat who was ...
in particular was discontented by the radicalism of the cause Beidas supported. Lebanese rumours claimed he was a British agent promoting British over French interests. In the jargon of the streets the Bank's name was spelt backwards to yield ''artni'', a slang expression for "He cheated me". In the early 60s, the Emir of Kuwait,
Abdullah Al-Salim Al-Sabah Sheikh Abdullah Al-Salim Al-Sabah (1895 – 24 November 1965, Arabic: ) was the eleventh ruler of the Sheikhdom of Kuwait and commander-in-chief of Kuwait Military Forces from 29 January 1950 to his death in 1965; he became the first Emir of t ...
, who was holidaying at the time in the mountain resort of
Aley Aley ( ar, عاليه) is a major city in Lebanon. It is the capital of the Aley District and fourth largest city in Lebanon. The city is located on Mount Lebanon, 15 km uphill from Beirut on the freeway to Damascus. Aley has the nick ...
demanded to see the 5 million dollars he had deposited with Intra. Beidas managed to put together the sum, and drove out to the Emir's villa, where he proceeded to slowly count the money out. Before he had finished, the Emir expressed his satisfaction that all was right, but Beidas, outraged by the lack of trust, told him to keep his cash.


Collapse of Intra Bank

At the time Intra bank faced the crisis that led to its bankruptcy, it and the empire Beidas formed around it has a value estimated at between $350 to $500 million. Beidas told George de Carvalho that on the eve of the crisis, Intra was 60% of all domestically controlled banking. The collapse of
Intra Bank Intra Bank (also known as Banque Intra or بنك انترا) was a Lebanese bank, and the largest financial institution in Lebanon until its collapse in 1966. Foundation and rise of the bank The bank was founded in 1951 by Yousef Beidas and t ...
in October 1966 brought the Lebanese economy to a halt and sent shockwaves throughout the Middle East. The circumstances which surrounded Intra's fall remain to this day controversial issues. The surprisingly weak support from the Lebanese government and the very public allegations over Charles Helou's role in the affair have been attributed to such issues as Beidas' Palestinian origin and envy over Beidas' almost complete control of the Lebanese economy. The bank had incurred losses in gold, copper and American
equities In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
. Much of Beidas' Intra Bank money was tied up in non-liquid real estate properties, and, with a sudden jump in Eurobank interest rates on dollar deposits when the US government took measures to curb domestic inflation, a crisis ensued. Furthermore, Beidas had, reportedly, bet all of his available liquid capital against the American dollar. A rush began, on Thursday 13, and Intra paid out $70 million, which by nightfall left only $330,000 in the Bank's coffers. The acting head of the bank, worth personally some $50 million, informed the Lebanese cabinet that he would personally guarantee his bank's balance sheet, but they refused to budge from their position. Irregularities were later discovered, -- none of them abnormal within Lebanon's banking system—such as loans to directors exceeding what was legally permissible, and dividend payments to Intra companies that were losing money. Beidas had also used funds held in trust to secure personal loans from Chase Manhattan and the
Banco di Roma Banco di Roma was an Italian bank based in Rome, Lazio region. It was established on 9 March 1880. Along with Credito Italiano and Banca Commerciale Italiana they were considered as bank of national interests. In 1991 the bank was merged with Ba ...
. Checks on Intra documents indicated false account statements, and an understating of liabilities to the tune of $40 million. In addition, Beidas has undercut the local norm advising that 25% of deposits be retained in liquid cash. Intra reduced this margin to 5% in its business practice. One observer in his recollections states that, nonetheless, the value of Intra's fixed assets, with extensive foreign property abroad, exceeded its financial liabilities. At this critical juncture, Saudi Arabia decided to withdraw its deposits from Beirut, causing a panic and a run on Intra's capital, beginning on 9 October. The Lebanese government, perhaps sensing a unique opportunity to cut Beidas down and strip him off his key infrastructural investments in Lebanon, refused to budge, or consider Beidas request for a $30 million bridging loan to tide Intra over the crisis. aside from a minor loan mortgaged on the casino, the Port Authority and the Airline. Joseph Oghourlian, deputy governor of Lebanon's central bank, asked him, "Why did you invest in Lebanon? You are not Lebanese, and Lebanon does not want you to control its economy", and turned down his request for a bridging loan down. In Beidas's recollection,
Raymond Eddé Raymond Eddé ( ar, ريمون إدّه; 15 March 1913 – 10 May 2000) was a Lebanese Maronite statesman who served his country for many years as a legislator and cabinet minister. He led the Lebanese National Bloc, an influential political ...
, president of the Lebanese Bankers Association, had a personal hatred for him, shared by the Lebanese Prime Minister,
Abdallah El-Yafi Abdallah El-Yafi ( ar, عبد الله اليافي - also transliterated as Abdallah Yafi, Abdallah Bey Aref el-Yafi and other variants; 7 September 1901 – 4 November 1986) was the Prime Minister of Lebanon serving twelve times between 1 ...
, who was annoyed that Beidas had denied him a personal loan, also pressured the Central Bank to turn down his loan request. Chase Manhattan also stepped in by freezing Intra's New York deposits until its own loans to the company were repaid. Though ranked 425th among the world's banks, the subsequent collapse of Intra became, 'the world's greatest bank catastrophe since World War 2.' Lebanese bankers stated at the time that the crack was simply due to the fact that Beidas was overextended. Many European bankers and the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
were to disagree, saying that a small loan from Lebanon’s Central Bank would have enabled Intra to ride out the crisis without strain. The decision not to intervene was to have drastically averse collateral impact on Lebanon's other banks, as local depositors withdrew their money to open up accounts in US banks. In addition, El-Yafi was forced to resign. Arab trust in the Lebanese banking system vanished, and investors thereafter preferred to place their funds in Zürich, London and New York. The ownership was turned over to the bank's largest depositors and it was to remain the largest financial institution in Lebanon for the following two and a half decades. According to
Anthony Sampson Anthony Terrell Seward Sampson (3 August 1926 – 18 December 2004) was a British writer and journalist. His most notable and successful book was '' Anatomy of Britain'', which was published in 1962 and was followed by five more "Anatomies", upd ...
many of Beidas' business investments turned out in the long term to be very shrewd.


Theories about the collapse

It was widely believed at the time of the crash that the fall of Beidas and his banking empire was politically inspired. Many conspiracy theories circulate about the basic reasons for the bank's collapse and the destruction of Baydas's empire. Some pinpoint its cause on a coalition of Western powers, oil-rich Arab countries, the Israeli Defense establishment, and Lebanese oligarchs. Others cite the Corsican connection, noting that the FBI believed that
Marcel Francisci Marcel Francisci (30 November 1919 – 16 January 1982) was a French politician and an alleged member of the Unione Corse who was accused of masterminding the French Connection drug network. As a young man, Francisci fought in World War II and wa ...
used the gaming tables at the casino to launder profits from drug-running, and attributing a significant role in the unplugging of the Bank to
Paul-Louis Weiller Paul-Louis Weiller (September 29, 1893, Paris - December 6, 1993, Geneva) was a French industrialist and philanthropist. Biography From a Jewish Alsatian family, Weiller was the son of the industrialist and politician Lazare Weiller (1858–19 ...
, claiming that the financier had connections with the heroin smugglers. Palestinian reporter and author
Said Aburish Said Aburish (full name Saʿīd Muḥammad Khalīl ʾAbū Rīsh) ( ar, سعيد محمد خليل أبو الريش; 1 May 1935 – 29 August 2012), was a Palestinian journalist and writer. Aburish was born in al-Eizariya (also known as "Bethany") ...
claims that jealous Lebanese business people, bankers and reporters were behind the demise of the bank. He writes that the rumors that doomed the bank started in the St. George hotel by, among others, a Lebanese whom Beidas refused to appoint to the bank's board and another Lebanese man who owed the bank a big loan. Aburish claims that, when the news of the failure of the bank became known, Lebanese reporters and business people celebrated its failure by drinking champagne in the St. George Hotel. As to the role of the Kuwaitis in the failure of the bank, Aburish claims that Beidas treated the
Emir of Kuwait The Emir of the State of Kuwait is the monarch and head of state of Kuwait, the country's most powerful office. The emirs of Kuwait are members of the Al Sabah dynasty. Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah became the emir of Kuwait on 30 Sep ...
disrespectfully which made Kuwaitis and other Arab countries in the
Persian Gulf The Persian Gulf ( fa, خلیج فارس, translit=xalij-e fârs, lit=Gulf of Fars, ), sometimes called the ( ar, اَلْخَلِيْجُ ٱلْعَرَبِيُّ, Al-Khalīj al-ˁArabī), is a mediterranean sea in Western Asia. The bo ...
area remove their money from the bank.
Wilbur Crane Eveland Wilbur Crane "Bill" Eveland III (July 1, 1918 – January 2, 1990) was a World War II veteran, a CIA station chief, and critic of U.S. foreign policy in the Middle East. His autobiographical book, ''Ropes of Sand'' (1980), details the many fa ...
in his book ''Ropes of Sand'' claimed that Kuwait caused the failure of the bank in an effort to induce Lebanon to accept more Palestinian refugees: "When Kuwait made huge withdrawals from Lebanon's Intra bank (to induce the country to accept more Palestinian refugees) the bank failed, and the collapse of the Lebanese economy was barely forestalled."


Aftermath and death

Beidas was in Europe trying to raise loans to refloat Intra when the Lebanese government contacted
Interpol The International Criminal Police Organization (ICPO; french: link=no, Organisation internationale de police criminelle), commonly known as Interpol ( , ), is an international organization that facilitates worldwide police cooperation and cr ...
to have him arrested and extradited. He fled to Brazil with his wife and three children to avoid legal charges, given the precarious legal situation for Palestinians in Lebanon. The following year he was indicted
in absentia is Latin for absence. , a legal term, is Latin for "in the absence" or "while absent". may also refer to: * Award in absentia * Declared death in absentia, or simply, death in absentia, legally declared death without a body * Election in ab ...
for fraudulent bankruptcy and the prosecutor asked for a sentence of 7 years hard labour. Though Brazil had no extradition agreements with Lebanon, Lebanese authorities requested a courtesy deportment to make him stand trial. He was placed under house arrest when Lebanese authorities circulated stories that he had financed Brazil's enemies. Beidas faked a heart attack and was recovered in a clinic to sidestep any extradition moves. Beidas died of pancreatic cancer in
Lucerne Lucerne ( , ; High Alemannic: ''Lozärn'') or Luzern ()Other languages: gsw, Lozärn, label= Lucerne German; it, Lucerna ; rm, Lucerna . is a city in central Switzerland, in the German-speaking portion of the country. Lucerne is the capital o ...
in 1968, aged 56. He was destitute and nursed by Nabiha, Edward Said's aunt on his father's side,. Rumours circulated that his decease was 'mysterious'.
Robert Vesco The name Robert is an ancient Germanic given name, from Proto-Germanic "fame" and "bright" (''Hrōþiberhtaz''). Compare Old Dutch ''Robrecht'' and Old High German ''Hrodebert'' (a compound of '' Hruod'' ( non, Hróðr) "fame, glory, honou ...
tried but failed to take over what was left of the bank. Najib Alamuddin wrote in his autobiography ''The Flying Sheikh'':
"I am convinced the affair was the beginning of the disintegration of Lebanon and its old type of Lebanese government - a system corrupt in style and morals that had plagued Lebanon since independence and finally plunged the nation into a civil war that threatened its very survival as an independent state."
Edward Said Edward Wadie Said (; , ; 1 November 1935 – 24 September 2003) was a Palestinian-American professor of literature at Columbia University, a public intellectual, and a founder of the academic field of postcolonial studies.Robert Young, ''Whit ...
had a slightly different take on the events in his autobiography ''Out of Place'':
"Beidas' astounding rise and fall was considered by some to presage the terrible Lebanese-Palestinian disputes of the seventies, but it seemed to me to symbolize the broken trajectory imposed on so many of he Palestiniansby the events of 1948"


See also

*
Palestinian Christians Palestinian Christians ( ar, مَسِيحِيُّون فِلَسْطِينِيُّون, Masīḥiyyūn Filasṭīniyyūn) are Christian citizens of the State of Palestine. In the wider definition of Palestinian Christians, including the Palest ...


Notes


Citations


External links


'The New MidEast Money Man'
TIME Magazine ''Time'' (stylized in all caps) is an American news magazine based in New York City. For nearly a century, it was published weekly, but starting in March 2020 it transitioned to every other week. It was first published in New York City on Ma ...
, 27 April 1962
"The Flying Sheikh"



References

* * * * * * * * * * * * * * * * {{DEFAULTSORT:Beidas, Yousef 1912 births 1968 deaths Eastern Orthodox Christians from Lebanon Palestinian businesspeople Palestinian emigrants to Lebanon Palestinian Christians 20th-century Lebanese businesspeople