U.S. Hedge Fund Loses $400 Million in Moroccan Oil-Refinery Deal

Caroline Theuri November 14, 2016
A Carlyle Group LP hedge fund has lost the $400 million it invested last year in a Moroccan oil-refinery deal. Photo Credit: Tekfen Engineering

A hedge fund owned by a U.S. investment firm has admitted to losing $400 million that it invested in a Moroccan oil-refinery deal last year. According to the Wall Street Journal (WSJ), “a hedge fund by the Carlyle Group was to receive a share of revenue at the Moroccan refinery, which ran into financial trouble and was seized by Moroccan authorities later in 2015. The refinery, known as Societe Anonyme Marocaine de l’ Industrie du Raffinage, or Samir, was put into liquidation this year.”

Approximately $400 million invested in petroleum commodities by the Carlyle Commodity Management hedge fund was misappropriated by third parties outside of the United States.

“Through September 2016, approximately $5 million in legal and professional fees has been incurred related to this matter, though additional litigation or claims could arise,” states a report by the Carlyle Group.

This is just the latest scandal to affect Samir. According to Morocco World News, the country’s only refinery has been plagued by cases of mismanagement since last year. In August 2015, Samir, which has a capacity to produce 200,000 barrels per day, ceased oil production operations. Its owner, Saudi Arabian businessman Mohammed Hussein Al Amoudi, holds a two-thirds stake in Samir through his company, Corral Petroleum Holdings, and the government holds the remaining one-third.

Last year, the Moroccan government seized Samir’s bank accounts and assets after accusing Al Amoudi of failing to pay taxes and oil smuggling without paying off authorities.

According to African Intelligence, Al Amoudi faces legal action from the government and oil suppliers due to a $2.1 billion debt, which has forced him to flee Morocco.

Al Amoudi is currently worth $ 8.6 billion, according to Forbes, which he accumulated through investments in agriculture, cement production, construction, mining, and oil.

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