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Crown Resources wants the Rich swagger, but not Rich
Updated 6:03 PM ET March 20, 2001
By Bernie Woodall
NEW YORK (Reuters) - Swiss-based commodities trader Crown Resources expects to have few links with fugitive financier Marc Rich after taking over Rich's trading house, Crown Chairman Elliot Spitz said Tuesday.
"At Crown, he (Rich) won't have any role and we would not foresee any position for him of any kind," Spitz told a New York press conference.
However, Spitz said Rich may serve as a consultant on an ad hoc basis. "... Like when you are buying a house from someone, you may have to refer back to that someone from time to time. Such opportunities may come up and if that does happen for sure we will be in touch with him."
He declined to comment on reports that Rich is to get $100 million for selling his company, Marc Rich Investments (MRI), to Crown.
Crown expects to complete its purchase of MRI in mid-April, Spitz said. The deal was announced in February.
Crown, part of Alfa Group, one of Russia's largest banking and oil conglomerates, will get a foothold in the United States when it opens offices for about 50 staff in White Plains, N.Y., the site of Novarco Ltd., a Marc Rich subsidiary that Crown is taking over.
It wants to grow by at least 50 percent in the next two years by increasing staff, trading territory and adding to the range of physical commodities it deals, Spitz said.
Spitz said he wants the combined trading turnover of Crown to go from the current $12 billion to $18 billion within two years.
Crown is eyeing the purchase of a smaller European trading house that deals primarily with petrochemicals and steel, Spitz said, declining to name the target.
Rich fled the United States in 1983 rather than face back taxes and an indictment for buying oil from Iran while American hostages were being held in Tehran. He lives in Zug, Switzerland.
"That was 20 years ago," Spitz said. "For us this is a straightforward business deal. We are a young company and we would like to complete this global business process."
Crown moved from Gibraltar, where Alfa is based, to Zug prior to last fall, when it began courting MRI, Spitz said. He indicated that the deal was well under way by Jan. 19 when former President Bill Clinton pardoned the expatriated Rich.
Spitz said MRI is active in trading in Africa and Asia in areas where Crown does not operate.
Crown will take over MRI's $2 billion turnover in annual trading of metals, mostly base metals such as copper and aluminum.
Spitz said Crown will continue trading Iraqi crude as part of the above-board oil-for-food program run by the United Nations. Alfa's other holdings include a large portion of Russia's Tyumen Oil Co.
"Spitz said Crown will continue trading Iraqi crude as part of the above-board oil-for-food program run by the United Nations. Alfa's other holdings include a large portion of Russia's Tyumen Oil Co."
Well, in that case, if Alfa wants to get a "foothold in the United States," they should have no difficulty in doing this. Even before Dick Cheney became Vice-President, he had enough clout to get Tyumen "$500 million in financing guaranteed by the Export-Import Bank of the United States" after "U.S. State Department cleared [it]...after a comprehensive review of Tyumen Oil's business practices." [TNK To Use New US Loans - Largest Ever For Russian Firm by Ex-Im Bank]
If "Crown will continue trading Iraqi crude," this will not necessarily stand in their way. Check this one out: BP and Exxon buy cargoes of Iraqi crude oil
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
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