Sinking the Nation: How Lebanon’s Elite Offshored Their Loot

Figure 1: Lebanese-Owned Offshore Companies Registered in UK (non-resident), Malta, and Luxembourg, 2000-2023

These periods coincide with two critical moments in Lebanon: first, the beginning of the central bank’s financial engineering program, which the World Bank later dubbed a “Ponzi scheme”.  The second, when this Ponzi scheme collapsed, the banks defaulted and froze Lebanese depositors’ accounts, and the country entered one of the worst financial and economic meltdowns in modern history.    

Notably, as the International Monetary Fund reported, over a handful of months in early 2016, Bank du Liban (BDL), Lebanon’s central bank, essentially poured money into Lebanese commercial banks “akin to a money-financed capital injection” equivalent to 10% of gross domestic product, with no equity stake for the public in return. Economist Toufic Gaspard, pegging this amount at $5 billion, has noted that it is “quite likely that these profits have been transferred in [dollars] outside Lebanon, not in favor of the banking institutions but in favor of their main shareholders.” At the same time, data from the UK, Luxembourg, and Malta shows that between 2014 and 2016, the rate of Lebanese offshore company formation almost tripled. 

The offshore business registries that Badil examined read like a Who’s Who of Lebanese banking, business, and politics. Among many others, the ultimate beneficial owners of offshore companies established since 2015 include: relatives of former Prime Minister Najib Mikati, namely Azmi, Taha, and Mohammed, disgraced former Central Bank Governor Riad Salameh, SGBL Chairman Antoun Sehnaoui, Byblos Bank Chairman Semaan Bassil, Fransabank majority shareholders Adnan and Adel Kassar, former minister and Bank al-Mawarid Chairman Marwan Kheireddine, Saradar Bank Chairman and CEO Mario Saradar, former Telecommunications Minister Jonny Corm’s son Mounir, former Member of Parliament Nazih Nejm, among many others. Importantly, this analysis examined only a portion of the jurisdictions in which Lebanese elites hold offshore companies. As Badil previously reported, numerous political and banking leaders hold shares in Lebanese banks through offshore companies based in many other jurisdictions.  

Offshore companies offer a myriad of benefits to the wealthy: tax minimization, anonymity, and asset protection. These financial vehicles are thus a darling of the well-heeled worldwide. Of all the UK companies established by non-resident Lebanese that Badil examined, 28 percent (341) were engaged in financial and real estate activities, almost all of which (97 percent) were created since 2015.  

UK real estate has long drawn in money from global investors, who view the prime properties, especially around London, as attractive stores of wealth. The Guardian, however, also recently reported that the “opaque trusts” holding roughly $86 billion worth of this property “are the go-to vehicle for kleptocrats stashing money in Britain.” Among the many Lebanese elite with a fancy for UK realty, Daraj recently revealed that, until recently, Marwan Kheireddine – chairman and owner of Lebanon’s Bank al-Mawarid – owned part of a UK property empire worth at least $200 million. 

Figure 2: Financial and Real Estate Companies Established by Non-Resident Lebanese in the UK (2005-2023) 

To be clear: the formation of offshore companies is not inherently illegal, and none of this is evidence that crimes have been committed. But legality is a low bar for morality. As Nicholas Shaxson, an authority on offshore finance, once wrote, offshore jurisdictions “routinely convert what is technically legal but abusive, into what seems legitimate.” What matters here is the pattern, the timing, and the consequences.

Lebanon’s elites began this massive offshoring of their capital just as the BDL’s “financial engineering” scheme from 2015 onward offered astronomically high interest rates on dollar deposits to lure foreign currency into the country. As Lebanon veered toward shipwreck, the captains of the economy, the political-banking elite, were quietly moving their own wealth out of the country while simultaneously assuring everyday depositors that all was well.  

The vast majority of Lebanese could not escape the 2019 crash, as their funds were frozen in their accounts, and the Lebanese lira plummeted in value. Simultaneously, the creation of Lebanese offshore companies surged further as the BDL continued to pillage the public purse through elite enrichment schemes, such as the Sayrafa platform, which offered banks, big businesses, and the well-connected a preferential exchange rate.  

For too long, the well-being of the everyday Lebanese has been collateral damage in a rigged game. This lack of accountability must end. Every offshore company created by Lebanese elites during this period should be scrutinized. Who owns what, when it was formed, and how it was used are questions that demand answers. Until then, the survivors of this national plunder will continue to sift through the wreckage, while the architects of ruin enjoy safe harbors far from the shores they helped submerge.