Khalid bin Mahfouz
Khalid bin Mahfouz | |
|---|---|
| Born | December 26, 1949 |
| Died | August 16, 2009 (aged 59) |
| Occupation(s) | Financier, entrepreneur, investor |
| Known for | Former chairman of the National Commercial Bank (NCB) |
Khalid bin Mahfouz (; born December 26, 1949 – died August 16, 2009) was a prominent Saudi billionaire, financier, entrepreneur, investor, and former chairman of the National Commercial Bank (NCB). He was the son of Salem Bin Mahfouz, a pioneering Saudi businessman who established NCB as the country’s first private banking institution.
With a personal fortune estimated at approximately $6 billion, Bin Mahfouz was ranked 24th among the most influential Arabs worldwide by Arabian Business magazine in 2008 and appeared at number 214 on that year’s Forbes Billionaires List.
In the aftermath of the September 11 attacks, which involved 15 Saudi nationals among the hijackers, Khalid Bin Mahfouz became subject to media allegations accusing him and his family of providing financial support to Al Qaeda.
Biography
Khalid bin Mahfouz was the second oldest son of Salem Ahmed bin Mahfouz, who rose from humble beginnings as an uneducated money-changer to founding Saudi Arabia’s largest bank, the National Commercial Bank (NCB). Salem also served as the House of Saud’s personal banker and delegated control of NCB to Khalid during the 1980s.
During the 1970s, Khalid acquired a chateau-style mansion valued at $3.5 million in Houston’s River Oaks neighborhood, known as "Versailles," along with a 44,000-acre ranch on Texas's Trinity River, close to James Bath’s property. Additionally, an estate covering 121 acres linked to him was auctioned in 2013 with a starting price near €2.4 million.
He secured Irish citizenship in 1990 through investment programs.
Bin Mahfouz was married and fathered three children. His individual net worth was assessed at $3.2 billion in 2006, while his family’s combined wealth exceeded $4 billion at that time.
False claims regarding relation to Osama bin Laden
Reports by high-profile sources and major publications such as The Wall Street Journal and The Washington Post suggested Khalid Bin Mahfouz was Osama bin Laden’s brother-in-law; these assertions were later disproven. Former CIA Director James Woolsey initially mentioned this connection before testifying to a congressional subcommittee but subsequently clarified to the Los Angeles Times that there had been a misunderstanding and he did not intend to implicate Bin Mahfouz’s sister. The Wall Street Journal issued corrections stating unequivocally that "None of Khalid bin Mahfouz's sisters is, or ever has been, married to Osama bin Laden."
As a non-executive board member holding a 20% stake in Bank of Credit and Commerce International (BCCI), a banking group later convicted for money laundering, bribery, terrorism financing, and arms trafficking offenses, Bin Mahfouz faced legal scrutiny. He was indicted by a New York grand jury on fraud charges but denied any misconduct. In 1995, he agreed to resolve the allegations by paying $225 million, describing this settlement as a strategic business choice to avoid extended court proceedings.
Alleged contributions to Osama bin Laden in 1988
According to Craig Unger’s House of Bush, House of Saud, Bin Mahfouz made donations exceeding $270,000 to Osama bin Laden’s Islamist faction at Salem bin Laden’s request. However, Bin Mahfouz’s legal counsel maintained that these funds were intended solely to support the US-backed Afghan resistance against Soviet forces and were not meant for activities beyond that purpose.
Allegations of NCB Financing al-Qaeda
Khalid bin Mahfouz firmly rejected claims that his bank, the National Commercial Bank (NCB), was involved in channeling funds to al-Qaeda. It was reported that certain Saudi businessmen transferred substantial sums through NCB to charities allegedly connected to al-Qaeda. Mahfouz maintained that he had no knowledge of these transactions and would have acted to stop them had he been aware.
According to Forbes, in 1999 the Saudi government purchased a 50% stake in NCB from Khalid for more than $1 billion, partly as a means to settle his outstanding debts. Although the family retained a 34% shareholding, Khalid stepped down from all management positions. Since 1998, NCB has not published audited financial statements, but it disclosed that provisions for non-performing loans during 1999–2000 amounted to $934 million, covering 86% of impaired debt.
NCB representatives have denied the existence of any audit report.
Mahfouz successfully defended himself in numerous legal actions related to terrorism financing allegations, with the exception of a case brought by Rachel Ehrenfeld, author of Funding Evil. Ehrenfeld, an American citizen, contested the jurisdiction of the English courts, accusing Mahfouz of engaging in libel tourism. In 2005, the High Court issued a default judgment against her, ordering an apology, destruction of book copies, and payment of $230,000 in damages. This ruling prompted the New York State Legislature to enact laws preventing enforcement of foreign libel judgments that conflict with U.S. free speech protections.
Sheikh Mahfouz acknowledged making a single donation of $270,000 to al-Qaeda during the Soviet-Afghan conflict period.
Muwafaq Foundation
Khalid bin Mahfouz founded the Muwafaq Foundation—which translates as "blessed relief"—with an initial capital injection of $30 million and appointed his eldest son, Abdulrahman bin Mahfouz, to serve on its board. In October 2001, the U.S. Treasury Department designated Muwafaq as a front organization. Although neither Khalid nor Abdulrahman were directly accused of terrorism funding, the charity’s director, Saudi national Yasin al-Qadi, was identified as a supporter of terrorism and consequently had his assets frozen by U.S. authorities.
United Nations Listing
In December 2002, Khalid bin Mahfouz was controversially identified as a financier of terrorism in a report prepared by French investigator Jean-Charles Brisard for the United Nations Security Council. The document named him among seven prominent Saudi individuals alleged to be major sponsors of al-Qaeda, perpetuating ongoing accusations despite no formal sanctions being imposed by the UN.