Gulf Finance House - Capital Reorganization and Raising - A Look "Behind the Curtain"

"Pay No Attention to the Man Behind the Curtain"

GFH published the agenda for its shareholders' general meeting on the capital reorganization/raising to be held 31 October.  So far only in Arabic on the DFM and on the KSE (copy below so you can follow along).  Strangely not yet on the BSE.

As the picture above suggests, by looking behind curtain we can get a real understanding of what's going on.

In brief the key points are:

1. The capital reorganization and US$500 murabaha are being structured to make them as attractive as possible to new investors.  That means that existing shareholders are being substantially diluted through a variety of clever means - which might not be apparent to most readers of the agenda for the shareholders' meeting. 
2. A share swap transaction between Mr. Janahi and GFH which seems designed to strengthen GFH's creditworthiness as well as provide some much needed "relief" on the CAR both in terms of risk weighted assets and potentially equity.

First, let's look at what's immediately visible:  the agenda for the shareholders meeting.   Shareholders are being asked to:

1. Approve a share swap between GFH and its Chairman/Executive CEO, Mr. Esam Janahi.  In return for his 104,923,734 shares in Khaleeji Commercial Bank ("KHCB"), GFH will give him 100% of its shares in AlAreen Company for Leisure and Tourism (whose main asset is the Lost Paradise of Dilmun Water Park in Bahrain) plus US$3 million.  The latter either in cash or Treasury Shares of GFH. 
2. Reduce the number of GFH's issued shares from 1,896,332,565 to 474,083,141 in a reverse 4:1 share split.
3. Reduce the paid in capital from US$625,789,746.45 to US$142,224,942.375.  A difference of US$483,564,804.075. 
4. Reduce the par value of shares to US$0.3075 from US$1.32.
5. Approve the issuance of up to US$500 million in a privately placed convertible murabaha through a special purpose company set up by the bank or established at its request.  (That is, the SPV will lend to GFH.  It will obtain its funding from various investors.)
6. The profit rate ("interest rate") on the murabaha to be the "market rate" according to the rate and formula established by the Board of Directors shortly before issuance.  Such profit rate to be payable in cash or additional GFH shares.
7. The conversion price to be between US$0.31 and US$0.40 per share - with the rate of discount not less than 20% to 40% of the market price of the shares - but not below the nominal share price.  The conversion price to be set by the Board shortly before issuance.
8. A tenor of 3.5 years.
9. Conversion at investors' option with right of Board to offer an early conversion "incentive" according to conditions the Board will set.  Note that means that the murabaha does not count as equity for either regulatory (CAR) or accounting purposes until it is converted.  For the latter, only the embedded equity option is counted as equity under IFRS.
10. Waiver of pre-emptive right of shareholders to new equity.
11. Authorization for Board or whoever it appoints to take necessary legal steps to implement and for Chairman or whoever he appoints to sign the necessary legal documents.
12. Conversion of GFH's share register to electronic form according to the rules of the Central Bank of Bahrain and the BSE.

Now a look behind the curtain via some hopefully informed analysis:

A.  Share Swap - KHCB for GFH

1. GFH gets several benefits from this transaction.
2. Immediate strengthening of GFH's creditstanding.  KHCB is a better asset than the Water Park, which is why the West LB syndicate asked for the former.  Probably better earnings and better future.  The Water Park like the Riffa Golf Course, no doubt, looked like a very "wise" idea on paper.  In the real world, it's probably not.
3. Regulatory relief on the CAR - a matter of great importance to GFH who sit right on the edge.  The first way this comes is by moving this "puppy" (the water park, which is risk weighted in the GFH's CAR calculation) to someone else's kennel (balance sheet).  In return GFH gets KHCB, increasing ts holding from 36.99% to 46.99%.  Currently, GFH partially consolidates  KHBC, and, thus,  it doesn't have to worry for CAR purposes about fluctuations in KHCB's share price - which has dropped by roughly 50% since last year this time.  Since KHCB's CAR is roughly 31% as at 30 June 2010, the impact on GFH's Risk Weighted Assets and thus its CAR should be positive.
4. As you'll notice, the US$3 million owed to Mr. Janahi can be paid in cash or GFH shares.  So there's a potential boost to equity if the latter can be used to settle this amount.  Treasury Shares are deducted from Shareholders' Equity at their cost. What this means is that if GFH gets more than zero in proceeds from the sale or conversion of Treasury Shares, the amount of its Shareholders' Equity will go up by the amount of the proceeds received.  This happened in 2Q10 where GFH sold US$29.1 million (original cost) of Treasury Shares for US$7.6 million and recognized a US$7.6 million consequent increase in Shareholders' Equity.  While admittedly a small card in the scheme of things, this could be just the thing that helps GFH keeps its head about the 12% threshold in a close situation.   As I suspect the 2Q10 Treasury Share sale was.
5. And, to round things out, a footnote on KHCB.  Without qualifying my opinion about the  credit benefit of acquiring KHCB, I call your attention to Note 3.4 in KHCB's Basel II Pillar 3 Disclosures as of 30 June 2010, which shows that some 24% of its Islamic Financing Assets are past due.  According to that information, some 42% of the past dues (BD47,385 - which is the total amount of the past due loans not just the past due installments which  are BD10,487) are up to 30 days late.  Proceeding cumulatively, 51% up to 60 days, and 72% up to 90 days.  According to KHCB's risk classification system, some 59% of the past dues are rated Credit Grades 1-6.  Personally, I would have thought a past due loan  would automatically go on the "watch list" (Credit Grades 7-8) but then I don't have the details of KHCB's loan portfolio including collateral.  In any  case those concerned with KHCB should keep an eye on this area to see if there is deterioration or improvement in the future.

B.  Capital Reorganization

1. Under the Bahraini Commercial Companies Law of 2001, GFH is obliged to take action now that accumulated losses are 75% or more of paid in capital. Approved methods for rectifying this situation are:  (a) reducing paid in capital by an amount sufficient to offset the losses and/or using other equity reserves (share premium, statutory or voluntary reserves), (b) raising additional capital and (c) a combination of (a) and (b).  Generally, financial institutions use Method (c).  In some cases a bank might get away with merely offsetting the losses against existing capital - assuming its pre-reorganization CAR were robust.  GFH's is not so it must do both.
2. As you'll notice, GFH is not using its reserves.  Why? Very simply put:  the path it has chosen is designed to make the murabaha more attractive to investors.  Under GFH's plan, they will get more of the total shareholding of the Bank for each dollar they contribute.  
3. 1H10 financials  provide the details of the components of GFH's capital.   If GFH were to use its US$206 million share premium and US$85 million statutory reserve  (total US$291 million), it would only have to "use" US$192 million of paid-in-capital.  Thus, leaving original shareholders holding US$433 million in common equity instead of US$142 million. 
4. To take control, the new money would have to put in US$433 million plus $1.  Under GFH's reorganization plan it only needs to put in US$142 million plus $1. 
5. Similarly, if the new investors put in the full US$500 million, under GFH's plan they get 78% of the total equity.  If the reserves were used as outlined above, they would only get 54%.
6. Clearly, there is a conflict here.  Existing shareholders want to be diluted as little as possible.  New shareholders want the most value for their new dollar.  Sadly for the existing shareholders, including the even "wiser" ones who invested in late 2009, their money is already spent.  The new and presumably much wiser investors need to be persuaded to part with their money.  GFH has set  the reorganization and the terms of the murabaha to make it as easy as possible to get the money that it desperately needs.

C.  US$500 Million Murabaha

1. Use of an SPV as the lender can be quite a useful device in shielding the identity of the new lenders/shareholders, particularly if the SPV is not incorporated in Bahrain.  It will depend on how much transparency the CBB wants to demand here and how far it can push this Bank which has an important and powerful friend in Bahrain.
2. One would expect the market rate for unsecured GFH debt to be rather hefty.  And the value ascribed to the option on GFH shares much less so.  The Board will price "at market" - which will mean in effect what investors demand. 
3. The approval also provides for a discount from market price of between 20% to 40%.   This is where the reverse split comes to play.  There is nothing in the Bahrain CCL that requires this as part of the capital reorganization.  I suspect GFH is hoping that  the reverse split will work a bit of magic on their market price.  Over the past two weeks, GFH has traded at KD0.033 (roughly US$0.11) per share.  A 4:1 reverse split should bring the price to say US$0.44 per share - allowing the Board to discount the conversion price to say just a whisker over par to make the transaction even more attractive. 
4. "But wait there's more" as they say on the late night TV ads for the ShamWOW!  The Board is allowed to offer an incentive (terms unspecified in the approval) for an early exercise.  That allows an even greater discount to attract new investors.  So, if the conversion price is set at a whisker over par, can the Board issue shares below par through this device? 
5. You ask about the hapless existing shareholders?  Well, GFH already has their money and needs more.  So they are out of luck.

KSE announcement below.

[12:17:53]  ِ.اجتماع الجمعية العمومية العادية و غير العادية لبيت التمويل الخليجي
يعلن سوق الكويت للأوراق الماليه بأن بيت التمويل الخليجي أفاده بأنه
سوف يتم عقد جمعية عمومية عادية و غير عادية للبنك في الساعه 9 من
صباح يوم الاحد الموافق 31-10-2010 في فندق منتجع و قصر العرين
وقد طلب البنك ايقاف التداول على اسهمه في السوق اعتبارا من اليوم
الاحد الموافق 17-10-2010 وحتى اشعار اخر حيث حصل على موافقة ‏
مصرف البحرين المركزي على ذلك .‏
هذا وسوف يتم خلال الجمعية العمومية مناقشة ما يلي
أولا : جدول اعمال الجمعية العامة العادية
ِ1- المصادقة على محضر الاجتماع السابق .‏
ِ2- المصادقه على معاملة استبدال الاسهم بين بيت التمويل الخليجي و رئيس
مجلس ادارته السيد /عصام جناحي و التى سيتم بموجبها تحويل حصته في المصرف
الخليجي التجاري ش.م.ب بالكامل (104.923.734 سهم ) الى بيت التمويل الخليجي
مقابل الحصول على حصه البنك في شركة العرين للترفيه و السياحه ش.غ.خ و ‏
البالغه 100% (جنة دلمون المفقودة) بالاضافه الى مبلغ 3 ملايين دولار تدفع
اما نقدا و / او بواسطة اسهم خزانه بيت التمويل الخليجي .‏
ِ3- الموافقة على تغيير سجل مساهمي البنك من سجل عادي الى الكتروني ‏
وفقا لاحكام مصرف البحرين المركزي و سوق البحرين للأوراق الماليه .‏
ثانيا : جدول اعمال الجمعيه العامه الغير عاديه ‏
ِ1- المصادقه على محضر الاجتماع السابق .‏
ِ2- التباحث في والمصادقه على دمج الاسهم الصادرة لبيت التمويل الخليجي ‏
بمعدل 4:1 لينتج عن ذلك تخفيض عدد الاسهم الصادرة من 1.896.332.565 سهم
الى 474.083.141 سهم .‏
ِ3- التباحث في والمصادقه على تخفيض راس المال المدفوع من 625,789,746.45 ‏
دولار امريكي الى 142,224,942.375 دولار امريكي بسبب الخسائر المتراكمه ‏
ِ(سيقدم المدقق الخارجي السادة كي بي ام جي بيانا مستقلا يتعلق بتاييدهم لهذا
التخفيض ) .‏
ِ4- التباحث في والمصادقه على خفض القيمة الاسمية الجديدة للاسهم والتي ‏
ستبلغ 1.32 دولار امريكي بعد الدمج و تخفيض راس المال المدفوع المشار اليه
في البندين 2 و 3 من بنود جدول الاعمال الى 0.3075 دولار امريكي .‏
ِ5- التباحث والمصادقه على قيام بيت التمويل الخليجي من خلال اية شركة
غرض خاص يؤسسها البنك او تؤسس بناء على طلبه لاقتراض ما يصل ‏
الى 500,000,000 دولار امريكي من خلال مرابحة تمويليه قابلة للتحويل
الى اسهم بناء على البنود و الشروط التاليه :‏
ِ- معدل ارباح يحدد وفقا لسعرالسوق ووفقا للمعدل والصيغه المحددة من قبل مجلس
الادارة قبل وقت قصير من تاريخ السحب . يمكن دفع  هذا الربح نقدا او في صورة
اسهم عينية في بيت التمويل الخليجي .‏
ِ- سعر تحويل يتراوح من (0.31 دولار امريكي الى 0.40 دولار امريكي) ‏
ِ(بمعدل خصم لا يقل عن 20% الى 40% من القيمة السوقيه في اعقاب
الدمج بحيث لا تقل عن القيمة الاسمية للسهم) فيما سيتم تحديد السعر النهائي ‏
من قبل مجلس الادارة قبل فترة قصيره من تاريخ السحب .‏
ِ- مدة تصل الى ثلاثة سنوات و نصف .‏
ِ- غير مضمونه و لكن قابله للتحويل بمحض خيار المستثمر الى اسهم في بيت
التمويل الخليجي قبل انتهاء المدة ووفقا للشروط التى يحددها مجلس الادارة.‏
ِ- حافز التحويل المبكر لتشجيع المستثمرين على التحويل الى اسهم قبل
نهاية المدة وفقا للشروط التى يحددها مجلس الادارة .‏
ِ6- منح التنازل عن حق الاولوية الخاص بمساهمي بيت التمويل الخليجي ‏
فيما يتعلق باصدار اسهم عادية جديده سيتم اصدارها عند تحويل تمويل المرابحه
وفقا لبنود الفقرة 5 من جدول الاعمال .‏
ِ7- تخويل مجلس الادارة و/او من ينوب عنه للقيام بجميع الاجرءات الرسمية ‏
المطلوبه و الصحيحه لتفعيل تمويل المرابحه بما في ذلك دون حصر تحديد و/او
تعديل شروط المرابحه والمستندات الاخرى ذات العلاقه .‏
ِ8- تخويل رئيس مجلس الادارة او من ينوب عنه بالتوقيع على تعديل عقد
التأسيس و النظام الاساسي نيابة عن المساهمين امام كاتب العدل فيما يتعلق ‏
بالتغييرات في راس المال لتعكس ما تقدم .‏
علما بأنه في حالة عدم اكتمال النصاب القانوني لهذه الجمعية سيكون الاجتماع ‏
الثاني يوم الاحد الموافق7-11-2010 في نفس الزمان والمكان وفي هذه الحاله ‏
ستسري احكام الماده 57 من النظام الاساسي للبنك. وفي حالة عدم اكتمال النصاب
القانوني في الاجتماع الثاني ، سيتم عقد اجتماع ثالث يوم الاحد الموافق ‏
ِ14-نوفمبر-2010 في نفس المكان و ذلك بسريان احكام المادة 57 من النظام
الاساسي للبنك . ‏

Gulf Finance House - Exits Bahrain Financial Harbor for US$40 Million and Land

GIH released two announcements on the Bahrain Stock Exchange today regarding its sale of its remaining stake of 49.88% in BFH Company to Emaar, a Bahrain based investment company with its headquarters in Bahrain.  You'll recall that at the end of 2007, GFH sold the buildings at the "heart of the BFH" to Emaar Bahrain for some US$425 million.  At that time they buyer was described as a 100% Bahraini owned company.

The second contained financial information - that the contract was for US$262 million and that GFH's cash return was US$40 million plus some plots of land in the area of the BFH, which the Bank (GFH) intends to sell piecemeal.  Presumably Emaar didn't think much of the land and so didn't want it.  I'm guessing that the sale contract was for US$262 million and in return for its BFH Company shares, GFH got the valuable land (US$222 million) plus US$40 million in cash.   Assuming that the land was transferred at book, then GFH would not have to recognize a loss on its sale.  But note this is all speculation.

Anyone out there got an update on ownership of Emar or Emaar? 

Gulf Finance House - 1Q10 Results Continuing "Transparency"

In GFH's announcement of 1Q10 results, Mr. Essam Janahi, Chairman, stated:

"The Board has taken a very prudent approach in declaring this result and is committed to continuing transparency in the way we do business."

This wouldn't be the first time that Mr. Janahi has publicly recognized the virtues of transparency.  Nor do I suspect it will be the last.  And if you were reading my post of yesterday carefully, you will notice that I highlighted this continuing commitment to transparency.  Or as we like call it here on SAM  كلام شريف

A noble goal.  One which of course an Islamic bank would have no trouble keeping.

I believe that GFH will be announcing tomorrow one small matter - almost too trivial to mention.  Oh, well, let me mention this since I've already typed this much of the post.

Seems that GFH's accountants added a matter of emphasis to their review report noting that while they did not qualify their opinion they called attention to Note 1 which discusses the lack of fundamental certainty about management basing preparation of the 1Q10 financials on the assumption that GFH is a going concern.  The auditors cited concerns about liquidity and the adequacy of the company's capital.

Now, I am sure that many of you out there are probably saying that I am being overly harsh.  This is not the sort of thing that need be disclosed in the press release.  After all, the company releases its financials and a seasoned investor will go first to the auditors' report.  So disclosure is made.  Indeed.

But, it seems when getting ready to send in its 1Q10  financials to the BSE, GFH inadvertently forgot to  include page 1 with the auditors' report.  As you might expect from the time it took to update GFH's ratings page on its website,  they haven't yet gotten around to loading the financials on the website yet.  All that's there is a copy of the newspaper ad.

We'll see tomorrow whether the disclosure of the matter of emphasis is in response to a letter from one of the exchanges.  Or whether GFH belatedly realized the small oversight and is releasing the info unprompted.

However, rather than leave on a negative note, I'll close with this quote from Group CEO, Ted Pretty:

“GFH is a flagship institution in Bahrain and the Islamic financial sector and we are committed to working hard to set a better example as a model participant. Islamic finance has excellent growth prospects and GFH is well placed to take advantage of this growth.”

 The commitment to set a better example as the flag bearer of Islamic finance is admirable.

Gulf Finance House - 1Q10 US$7.5 Million Loss

GFH has posted press releases on 1Q10.   English language here.   Arabic here.

And summary financials here.

Hard to do an in-depth analysis based on a one page "newspaper" announcement.

Nonetheless, some preliminary comments.

GFH's liability restructuring defused an imminent threat, but only "just". Of the US$180 million restructured, US$120 million comes due this year. US$100 million in August and US$20 million one month later.

Barring an asset sale miracle, it's probably likely that these amounts - or substantially all of them  - are going to have  rescheduled.

But that's really only a small part of GFH's problems.  The central issue for GFH still remains whether its  "proven business model" can generate sufficient cash to pay the light bills.   Debt repayments can be stretched out, but if you can't make the operating expenses it's very difficult to continue in business.

Based on 1Q10 numbers, it's hard to be optimistic.

A very quick and admittedly crude estimate is that GFH has a quarterly minimum cashburn rate of  somewhere around US$ 12 million to US$15 million before other cash drains, e.g.,  customer deposit withdrawals, repayment of interbank deposits, project funding, etc.   GFH's ending "cash" at 31 March 2009 was US$21.5 million.

While it's early in the hoped for turnaround, so far cash income generation is still lagging.  In 1Q10, cash operating income was roughly one-third of the declared US$18.5 million in accrual income.  Less than 50% of the minimum estimated cash burn.  Only a "timely" sale of Investment Securities (US$21.l2 million) saved the cash position which was US$21.3 million at 31 March 2010 as per the Cashflow statement.

Apropos of Ted Pretty's comment about new products, one has to ask what products customers are going to be comfortable buying from it.  Will they be willing to give GFH money today for products to be delivered in the future?  Would the Central Bank be wise to approve GFH selling such products?  If not, then the deals have to be spot - customer cash against an existing asset.  That will require a lot of volume to generate significant profit.  Can GFH move US$100 to US$200 million in product?  What sort of margins can it generate on such sales in this environment?  And with its own name a bit tarnished?

So it appears that asset conversion not income is the key in the near term - probably the rest of 2010 and perhaps the early part of 2011.  

So let's take a look at some of the sources and uses of cash.

1. Placements - Shown as US$156.7 million with Cash of US$5.4 million.  Looks like comfortable  liquidity.  But roughly $140 million of these are pledged for projects so liquidity is weaker than  it  appears. That pledge was disclosed in Fiscal 2009 financials.  And you get a hint here in the 1Q10 Cashflow statement - where only US$16 million of Placements are considered "cash".  Without the 2009 note, you wouldn't know if that's due to tenor or because they're pledged.   
2. Investment Banking Receivable - No change since 31 Dec 2009.  This bears watching for timing and probability of collection.  GFH had written roughly half of the IBR off during 2009.
3. Other Assets -  Recall that roughly US$188.3 million of this is project costs funded.  So return of principal is dependent on sale of the projects.  Assuming the best regarding ultimate value, probably not a likely near term event.  This category also ties back to the Placements.  If GFH can extract itself from future obligations to fund, then US$140 million or some portion of Placements could become liquid.  But might that risk the US$188.3 million already invested and carried here? 
4. Investors' Funds are down roughly US$50 million.  The Cashflow appears to only account for US$29 million.  Hopefully the notes will explain.  The question here is whether customers are withdrawing funds - which could add another cash drain burden.

In this context it's hard for me to understand the continuing conversion of the murabaha.  I really don't see an economic rationale.  One thing that does occur to me is that this is a device to provide equity to the company - with amounts and timing of contributions at will.  Perhaps to avoid triggering covenants in debt agreements.  Once converted the shares could be sold back into the market - taking a loss on the conversion but still perhaps a price to be paid for keeping the company operating.  If anyone out there has a thought on this topic, I'd be very interested.

Gulf Finance House - 1Q10 US$7.5 Million Loss

GFH announced its 1Q10 earnings: a US$7.5 million.  Here's the report from AlBilad in Bahrain.

As you'd expect management tried to put the best face on the results by noting the improvement  over 1Q09 and the disastrous 4Q09.   The progress cited is a cut in expenses by 45% to prior quarter - unclear if it's 4Q09 or 1Q09.  I'm guessing the latter.  As well as that there were no additional provisions.  Then a comment that the earnings release was in the spirit of transparency which the Bank has followed in the conduct of its activities.   Hope was expressed that 2Q10 would should continued improvement.

The former arguments were made by Essam Janahi.  Then Ted Pretty took the press release "floor" noting   that cost cuttings had saved US24.5 million in expenses.  And that the firm was launching new products which would contribute to future earnings.   That's the key issue for GFH - driving the revenues line.  There's only so far one can go with cost cutting.

To be fair there's been some progress.  But GFH still has a rough road ahead of it.  Key will be rebuilding customer confidence in its ability to deliver.

There's nothing on GIH's website yet.  When the financials are released, I'll take another look.

Gulf Finance House - Financial Delusions

GFH held its Ordinary General Shareholders' Meeting 24 March.  

Or as GFH described it: "successfully conducted and concluded its Annual General Meeting (AGM) and has secured its shareholders’ support and agreement to the Bank’s strategy to return to profitability."

There were some press reports that the shareholders' had not voted for the customary discharge of the board of directors for their conduct during 2009.  This is not correct.  Apparently, one shareholder refused to vote "yes" on this agenda item.  Under Bahraini Company Law, such a shareholder needs to ensure that his objection is formally recorded in the minutes for it to have legal standing.  Failure to do so means that later he cannot take any action against the Board.  Registering his objection provides him a theoretical legal "base" for any subsequent action he wishes to take in the courts or with regulators.   However, if only one shareholder has so objected, it's unlikely this will result in anything threatening to GFH.

One quote did catch my eye.  

The Gulf Daily News quoted Dr. Janahi on the difference between real and and what I guess he considers imaginary losses.

He said that while last year was particularly difficult across the globe, and particularly for GFH, the bank had in fact only suffered real losses of $72 million if you stripped out asset right downs.

Those who read GFH's 2009 Annual Report will recall that the net loss for 2009 was some US$728 million.   With a bit of financial engineering, Dr.Janahi has transformed this loss into just a mere US$ 72 million.

I thought I'd highlight this quote because there are a lot of people out there who think that non cash write downs of assets are losses.  And without the benefit of Dr. Janahi's theory of corporate finance these people may be needlessly suffering.

So you really didn't take a loss if you took a non cash charge on:

1. That Lehman Brothers or Bear Stearns stock you bought.
2. Those "AAA" related mortgage backed securities you bought.  This will I believe be particularly comforting to shareholders of GIB and ABC.
3. That apartment or house you bought which isn't worth what you paid for it.
4. Or those GFH shares you bought for KD1.000 in February 2008 which now trade at KD0.068.  (That's right 6.8% of what your cash outlay was).  Especially these.  Under Dr. Janahi's new corporate finance theory, you really haven't lost at all because the decline in value was non cash.

At least that's what the good Doctor would have you believe.   It's an application to matters financial of the theory that if you don't recognize a problem it doesn't exist. 

Not sure I'd buy any investments from a firm that believes this.

Esam Janahi - AlQabas Analysis of His Career

 

Sunday's AlQabas has a long article dissecting the career of Mr. Janahi since 1999 (the year he burst on to the GCC financial scene) under the headline "From Sparrow to Peacock Back to Sparrow". 

As you might surmise, this is not the usual puff piece about a visionary leader and financier.  

Rather it postulates that Mr. Janahi's success was due more to skillful media relations, including expenditures, than substance.  It also claims that substance was rather short: that after announcing grand projects Mr. Janahi did not see them through to completion but jumped  to announce new billion dollar projects.  Потёмкинские дере́вни if you will.

There is also additional commentary by the lawyer of Mr. Khalid Bin Ahmad AlSuwaidi about the lawsuit he brought against Mr. Janahi.  Obviously, Mr. AlSuwaidi's lawyer is not neutral in this matter.  The new data offered here are Mr. AlSuwaidi's allegations (note that word)  that Qatar Energy City was his idea, that he and Mr. Janahi were supposed to be equal partners in it, and that Mr. Janahi set up a company in Bahrain which he controlled (registered in the name of his brother Rashid) and then illegally transfered assets in the original company (founded by both parties) and thus took control of the project.

The publication of this article seems to mark the official "fall from grace" of Mr. Janahi as this sort of article has not appeared before. 

Ahmed AlSuwaidi v Esam Janahi - Update on Lawsuit

According to press reports, the Court of Cassation in Bahrain (the country's highest court) has overturned the decision of the Court of First Instance and the Appeals Court to reject Mr. AlSuwaidi's lawsuit against Mr. Janahi.  The Court of Cassation has remanded the case to another Appeals Court.

Mr. AlSuwaidi is seeking US$125 million in compensation related to "The Energy City in Qatar".  As per the article originally he and Mr. Janahi were parters in a Caymans registered company "Gulf Energy Company" which was to develop the Qatar Energy City.  It's not explained how, but Mr. Janahi acquired control the project which the article states cost several billion dollars and opened in March 2006.

Here's a report from AlKhaleej (UAE) and AlQabas (Kuwait).  

You're not likely to see anything in the Bahraini press given the constraints imposed by the Press Law (Law #47 of 2002).  And that's why in the Bahraini press the name of the former CEO of The International Banking Corporation was not mentioned in the article on his arrest.  Or why the Bahrain press will not publish the name of a businessman or company declared bankrupt by the court.