Newsmaker

'Golden boy' Algerian banker arrested in Britain

(AFP)
Updated: 2007-03-05 22:31

LONDON - British police have confirmed that Algerian former banking "golden boy" Rafik Khalifa, whom Algiers wants extradited to face trial for a financial scandal, has been arrested and released on bail.

British police have confirmed that Algerian former banking "golden boy" Rafik Khalifa, whom Algiers wants extradited to face trial for a financial scandal, has been arrested and released on bail.[AFP]

"We can confirm that officers from our economic and specialist crime unit arrested a 40-year-old man on suspicion of money laundering on February 27," a Scotland Yard spokesman told AFP late Sunday.

"He has been bailed to return to a central London police station on March 20. Enquiries are continuing."

Algerian Prime Minister Abdelaziz Belkhadem had earlier told reporters in Algiers that Khalifa had been arrested by British authorities, but police in London would not confirm this initially.

The wealthy Khalifa, son of a minister in the government of Algeria's first president Ahmed Ben Bella, has been staying in London since 2003, where he claims he has been granted "political asylum."

Khalifa is being tried in absentia in Algeria in a case billed as the largest financial scandal in the north African country, and Algiers has been pursuing his extradition from Britain.

A spokeswoman for Britain's Home Office, which handles extradition cases, told AFP: "We wouldn't discuss an individual case. We wouldn't confirm or deny whether a request for extradition for a particular individual had been sought or may be in prospect."

She added: "The United Kingdom is not a haven for criminals and we stand ready to assist any extradition request to the extent that the law allows."

Police sources told AFP they did not believe an extradition request was being pursued by British authorities.

Algeria and Britain on February 25 exchanged the instruments of ratification -- the final formal step -- to put in effect an extradition treaty signed in July 2006.

Algerian Interior Minister Yazid Zarhouni demanded Khalifa's extradition.

"There cannot be serious cooperation between Algeria and Britain on other (judicial) matters if we cannot sort out a case like the extradition of Khalifa," he said.

The Khalifa scandal lifted the lid on serious concerns about failings in the running and control of the Algerian banking system, one of the most archaic in the Arab world.

Khalifa built up a business empire employing about 20,000 people, with Khalifa Bank, Algeria's biggest private bank, at its core.

The bank at its height had a total annual turnover of about one billion dollars and also dealt in real estate, construction and car rental.

But the group came crashing down around Khalifa's ears in 2003 after three executives were arrested at Algiers airport with a suitcase stuffed with two million euros (US$2.6 million).

In the ensuing collapse thousands of small investors in Algeria and France saw their savings wiped out. Khalifa then fled to London.

A court case concerning the disappearance of more than 3.2 billion dinars (36.5 million euros, US$47.5 million) from Khalifa Bank's accounts started last month in Khalifa's absence.

"If Khalifa is extradited before the verdict, it risks disrupting the trial," Khaled Bourayou, the lawyer for one of those charged in the group trial, told AFP.

If that happened, a new inquiry by the prosecutor would be opened and the trial in absence would be abandoned, he added.

The case was to be followed by others covering accusations of corruption and fraud in other Khalifa companies, including Khalifa Airways and the K-TV television station.