HSBC to Pay $10.3 Billion For Republic
By ALAN COWELL
Published: May 11, 1999
LONDON, May 10— HSBC Holdings P.L.C. announced today that it would purchase the
parent company of the Republic National Bank of New York for $10.3 billion cash,
the biggest foreign takeover deal for an American banking company.
The purchase of the Republic New York Corporation and an affiliate by HSBC -- an
international banking group based in London with antecedents in Hong Kong and
Shanghai -- would double the size of HSBC's private-banking business. It would
also give HSBC the third-biggest retail branch network in the New York region,
serving lower- and middle-income customers with low-cost checking and free
automated teller machine services.
Banking industry analysts said the deal largely reflected HSBC's efforts to
expand its highly profitable private-banking operations, which serve very
''Strategically it fits,'' said James Johnson, an analyst with Credit Lyonnais
Securities. ''It complements them in an area they have been pushing: wealth
The deal would likely result in layoffs at Republic's New York operations to
eliminate duplication with HSBC Bank USA, the network of American branches
formerly known as Marine Midland. Analysts also said that the effects of the
deal on Republic's less affluent customers remained unclear, with the
possibility of new services and higher fees. [Page C6.]
Republic's sale would mark the end of independence for a banking business
founded more than three decades ago by Edmond Safra, a Lebanese-born Jewish
businessman who is regarded as an enduring figure in the banking world.
Mr. Safra, 66, suffers these days from Parkinson's disease, a neurological
disorder, and there had been growing speculation in recent days that he might
sell. Republic's stock rose 14 percent on Friday, and HSBC's purchase plan was
reported on Sunday evening by Bloomberg News.
Under the $72-a-share agreement, HSBC is buying the Republic New York
Corporation and an affiliated company, Safra Republic Holdings S.A., the parent
of banks that serve clients in havens like Switzerland, Luxembourg and Monaco.
HSBC has grown aggressively out of its roots in the colonial Hongkong and
Shanghai Bank. It is now a major competitor in the business of managing money
for the wealthy, a profitable business that helps offset the risks in such other
operations as loans to emerging-market countries of Asia.
The deal would surpass the previous record for a foreign takeover of an American
bank, the $10.1 billion purchase of Bankers Trust by Deutsche Bank announced
late last year. It would also be HSBC's biggest purchase since it acquired
Marine Midland Bank of Britain for $6.1 billion in 1992, which led to the
relocation of its headquarters from Hong Kong to London.
The combined HSBC and Republic would have assets of $554.4 billion and currently
employs 136,700 people. HSBC said that it would finance the purchase partly
through through borrowing and a $3 billion stock sale, and that the deal would
eventually result in $300 million annual savings.
Its spokesman, Adrian Russell, said the move would maintain the bank's stated
intention to balance its holdings in the industrial world with investment in
emerging markets. And, he said, ''It gives us an extra million customers in the
world's biggest economy.''
The acquisition requires regulatory approval in Britain, the United States, Hong
Kong and elsewhere, but Mr. Russell said HSBC hoped to complete it by the end of
HSBC announced last year that it would list its shares for trading in the United
States, and there has since been speculation that it planned a big American
After rising Friday on takeover speculation, Republic shares fell $1.9375, to
$68.0625, in New York today. Safra Republic shares, traded in Luxembourg, soared
17.5 euros to close at 66 euros. Both HSBC Holdings and HSBC's separate class A
shares fell more than 2 percent here.
By purchasing Safra Republic Holdings, HSBC will acquire 30,000 international
clients in high-margin private banking, a business that generally caters to
people with $1 million and more to invest. The affiliate has 44 offices holding
client funds that total $56.5 billion.
''What they want to capture is an ever-growing number of millionaires in Asia
and, to some extent, in Latin America,'' said Simon Samuels, a banking analyst
with Salomon Smith Barney here. Wealth management, he said, was also seen as
''the flavor of the next century'' on the assumption that with governments less
able to provide pensions, there would be a corresponding boom in private
investment by individuals.
John Bond, HSBC's chairman, said: ''The acquisitions we have announced today
will bring together two complementary private banking franchises. At the stroke
of a pen, it doubles the size of our consumer-banking operations in the United
States, and it doubles the size of our private-banking business around the
Chart: ''At a Glance'' HSBC's acquisition of Republic New York will give it a
substantially larger presence in the United States, particularly in the New York
area where Republic has the third largest branch network. HSBC HOLDINGS
Headquarters -- London Chief executive -- Keith R. Whitson Employees -- 144,500
1998 net income -- $4.3 billion 1998 revenue -- $43.4 billion 1998 assets --
$483 billion Return on assets -- 1.3% (1997) Largest shareholder -- Hong Kong
Monetary Authority (9%)* REPUBLIC NEW YORK Headquarters -- New York Chief
executive -- Dov C. Schlein Employees -- 5,800 1998 net income -- $248 million
1998 revenue -- $3.5 billion 1998 assets -- $50.4 billion Return on assets --
0.5% (1998) Largest shareholder -- Edmond Safra (29%)* *Hong Kong figure as of
September; Safra figure as of December. (Sources: Bloomberg Financial Markets,
Hoover's Handbook, South China Morning Post)(pg. C6)
Edmond Safra dies in fire
December 3, 1999: 2:57 p.m. ET
Billionaire Banker killed on verge of selling his
Republic National Bank to HSBC
NEW YORK (CNNfn) - Billionaire banker Edmond Safra was
killed early Friday when fire engulfed his Monte Carlo
home, following an attack by two hooded men, according
to Monaco's official press office.The death abruptly ended a half-century career in
which the 67-year-old Safra, the scion of a Jewish-
Lebanese banking dynasty dating back to the Ottoman
empire, parlayed his financial skills into a global
network with banks around the world.The two attackers remained at large into the
evening local time Friday, with authorities searching
for them in the tiny principality as well as the
neighboring region in France.
In process of selling his banks
At the time of his death, Safra, who was suffering
from Parkinson's disease, was selling his controlling
stakes in both Safra Republic and Republic New York
Corp. (RNB) -- banks he founded and often referred to as
his "children" -- to Britain's HSBC Holdings for $3
billion. Last month, Safra agreed to take a $450 million
price cut in HSBC's offer, salvaging the deal after
months of delay.
Republic New York is the fifth-largest bank in the
New York in terms of deposits, with $12.4 billion, or a
4.3 percent share, in the metropolitan region.On Thursday, the U.S. Federal Reserve said its
board of governors plans to review the transaction at a
closed-door meeting Monday. Republic shareholders
approved the deal on Nov. 30, but Federal regulatory
clearance is required before the deal can be completed.
Bank sales still on track for now
Officials with Republic New York said Friday that
Safra's death would not affect the deals, saying he had
prepared for this possibility due to his failing health."He was not 100 percent well, so everything has
been codified," said Melissa Krantz. "That's what
lawyers are for. Everything that was agreed-upon is
still valid; Safra had his house in order." She said the
deal is expected to close by the end of the year.But some others sounded a more cautious note."There's no precedent for this kind of thing
because no other banking deals of this size had one
dominant shareholder like this," said the head of bank
credit research at an international financial
institution, requesting anonymity.
Safra owned 31 million Republic New York shares,
valued at an estimated $2.2 billion, which represented
about a 30 percent stake in the bank, as well as a 21
percent holding in Safra Republic worth roughly $1
"Everyone was appalled to learn of the news and
extends the deepest sympathy to Mrs. Safra," HSBC said
in a statement.John Bond, HSBC Holdings' chairman, said his company
would uphold both "the tradition and integrity of
Wife and her granddaughter survive
Safra, one of the richest men in the world
according to Forbes magazine, dies without any children
of his own. The child who was in the apartment at the
time of the attack was his wife's granddaughter. Both his
wife and the child were not injured after barricading
themselves in a bathroom, but the child's nanny died in
the same room as Safra. Authorities said both suffocated
on smoke from the fire.
The blaze gutted the top floor of his turn-of-the-
century "Belle Epoque" apartment. The crime shocked the
wealthy community, which is known for its low crime and
widespread video surveillance to protect its rich and
Officials said the fire erupted at the exterior of
the building around 5:30 a.m. local time and quickly
spread to the interior. The fire was brought under
control by 8 a.m., police said.
Sources in London told CNN that Safra had received
death threats in the past. Officials said a bodyguard
who tried to fend off the assailants was suffering from
light abdominal injuries. His life is not believed to be
A trader from the age of 16
Safra was a prominent figure in international
finance beginning at age 16, when his family sent him to
set up a private trading company.From there, he built on a tradition begun by his
ancestors, who served as gold traders and financiers
between the Ottoman hubs of Aleppo, Constantinople and
The Safra family relocated to Beirut when the
Ottoman empire collapsed after World War I. In 1953,
after anti-Jewish riots in Beirut followed the birth of
Israel, the family packed its bags again, heading to
Brazil -- where Safra remained until 1962, the year he
sold his Brazilian interests to his Brazilian brothers,
Joseph and Moise, to start his own private bank. He
subsequently moved to Geneva to start a private bank.
Safra's vast multinational business network
encompassed Republic National Bank of New York -- a unit
of Republic New York Corp., established in 1966 -- the
Luxembourg-based Safra Republic Holdings and the New
York-based First International Bank.
Unlike his private bank operations catering to the
rich, Republic New York built its business at the retail
level. With 74 branches, it is fourth in its network of
branches in the metropolitan New York region, third in
the city itself. It was one of the first banks to give
home appliances to clients bringing in new deposits of
$10,000 or more, and it is one of the few major banks in
the city not to charge non-customers for using its
automatic teller machines.
But Safra's ascent to the financial heights was
anything but smooth.
After selling his private European bank, Trade
Development Bank, to financial-services giant American
Express in 1983, a bitter dispute ensued. Safra
successfully defended himself against allegations that a
new bank he set up in Geneva was serving as a conduit
for laundered drug money. American Express was forced to
apologize to Safra in 1989 for starting a smear campaign
against him and it paid $8 million to charities of his
Safra's later decision to accept a $450 million
price cut from HSBC for Republic, made last month, came
after a major client of Republic was charged with fraud.
He also took big losses after Russia defaulted on
its overseas debt during last year's financial meltdown,
forcing Republic to overhaul its operations and lay off
Safra was also known for his philanthropic work
with community centers, universities and Yeshivas
throughout the world, as well as for his advocacy on
behalf of the environment.
Republic New York's shares opened Friday at 70-7/8,
down 9/16 from Thursday's close. It was at 70-5/8, down
13/16 in mid-afternoon trading.
Shares of HSBC closed at 845 pence, up 24, in
trading in London Friday. Back to top
--from staff and wire reports
Republic Founder Edmund Safra Found Dead
DEC 3, 1999 2:00am ET
Dec. 3, 11:00 A.M. -- Edmond J. Safra, who founded Republic Bank of New York,
was found dead Thursday in his penthouse in Monte Carlo.
Billionaire Lily Safra, widow of banker Edmond Safra, is no stranger to
mysterious deaths, and a new book details the curious demise of another of
Safra’s four husbands.
“Gilded Lily,” by The Post’s Isabel Vincent and due out from HarperCollins on
June 29, reveals suspicious details surrounding the apparent suicide of her
second husband, Alfredo Monteverde, a charismatic Brazilian businessman who had
troubles with depression.
Monteverde died in 1969 of two gun-shot wounds to the chest, but investigators
at the time recovered only one bullet, Vincent reveals. They also found no
gunpowder on Monteverde’s hands at the scene.
Vincent, who combed through Brazilian police records, discovered that despite
their concerns, detectives quickly lost the two main pieces of evidence — the
gun and the single bullet.
Monteverde died after returning from a lunch with Lily, where they discussed
divorce proceedings and how to split time with Alfredo’s adopted son and Lily’s
two sons and daughter.
SAFRA ‘KILLED’ NURSE: LAWSUIT
By Dareh Gregorian
December 4, 2002 | 5:00am
His caretaker was found guilty of the killing, but the children of Vivian
Torrente say in a $100 million lawsuit that slain billionaire Edmond Safra was
the one responsible for their mother’s death.
Ted Maher, 44, was convicted Monday of arson leading to both Safra’s and
Torrente’s deaths on Dec. 3, 1999, when he set a blaze in the financier’s Monaco
apartment in a failed bid to make himself look like a hero by “rescuing” Safra.
The action by Jason and Genevieve Torrente, however, charges that it was
actually a desperate and crazed Safra who doomed their mom.
“There is very graphic evidence pointing to Mr. Safra’s culpability in Vivian
Torrente’s death,” said the kids’ lawyer, Kenneth McCallion.
Maher and Torrente, 52, were both assigned to provide nursing care to the
67-year-old Safra, who suffered from Parkinson’s disease.
The Manhattan State Supreme Court suit says Safra apparently locked himself
inside of his bathroom with Torrente after the fire broke out and viciously
blocked her attempts to leave. During the criminal trial, Maher’s lawyer had
contended that Safra was paranoid armed intruders were outside the bathroom
The suit says Torrente’s autopsy showed “there were ‘combat-like’ marks on [her]
neck . . . and blood in her thyroid, indicating that Vivian Torrente struggled
to escape the bathroom where she and Mr. Safra were located, and that Mr. Safra
restrained her and prevented her escape.”
The mom “also had bruises on her knees and Mr. Safra’s DNA under her
fingernails,” the suit says. Both died of asphyxiation. McCallion said the
autopsy report was “inconclusive” as to whether she was asphyxiated by the smoke
or by Safra putting her in a choke hold.
The suit adds that Jason, 30, and Genevieve, 23, didn’t know about the autopsy
report until Maher’s trial – and accuses Safra’s widow, Lily, of conspiring with
various insurance companies to keep the details of their mother’s death a
It also says Torrente’s husband, Irineo Torrente, convinced the kids to sign off
on a settlement agreement before they found out about the circumstances of her
Published reports say that deal was for $2 million, half of which the kids were
supposed to split, but McCallion said the children have received only “minuscule
sums. What the father got, we don’t know at this point.”
Lily Safra could not be reached for comment yesterday, but earlier this week
said Maher’s conviction had cleared her husband of any wrongdoing in Torrente’s
The strange case of Edmond Safra
When the billionaire banker Edmond Safra died in an apparently bungled robbery
at his home in Monte Carlo, the initial suspects ranged from the Russian mafia
to the Colombian drug cartels. But then the police arrested one of Safra's 12
nurses and the strange story became stranger still
View more sharing options
Saturday 28 October 2000 19.06 EDT
Each night in Monte Carlo, it is said, a recording of predatory birds is
transmitted through hidden loudspeakers in the main square to prevent sparrows
from soiling the famous casino's pristine lawn. And each morning a platoon of
gardeners removes dying petals from the immaculate flowerbeds. Amid such
stainless perfection, a prison could look embarrassingly conspicuous. The
authorities in the world's wealthiest state have dealt with the problem by
locating the local jail on the very extremity of its tiny landmass. Of the
thousands of tour- ists who file past the old fort on the rocky promontory of
Monaco Ville, between the Oceanographic Museum and a cheesy celebration of the
Grimaldi family called the Monte Carlo Story, very few realise that incarcerated
within its walls are the principality's 20 or so prisoners. There are no
signboards nor, indeed, any apparent entrance. The only clues to its true
purpose are the bars on the windows and the battery of security cameras on the
roof - hardly an atypical sight in Monaco.
Among the inmates, most of whom are imprisoned for fraud or other white-collar
crime, is Ted Maher, a 42-year-old former Green Beret in the US Army. Last
December, Maher was arrested following the deaths of billionaire banker Edmond
Safra and his nurse in circumstances that remain oblique and subject to a
multitude of speculative theories. Initially, Maher was not a suspect. Those who
were, suggested one newspaper, 'range from the Russian mafia to Japanese
investors, through drug cartels and Middle Eastern trading companies'. It seemed
that Safra, 67, who was renowned for his protective shield of Israeli
bodyguards, was a man with no shortage of enemies. And, equally, Maher, a
smalltown American who never travelled beyond US borders in his three years in
the army, appeared to be someone who was a total stranger to both drug cartels
and the Moscow mafia.
How he came to be in Monaco was a result of unforeseeable happenstance. Working
at the Columbia-Presbyterian Medical Center in New York, where he had qualified
as a licensed nurse, Maher found an expensive camera which he promptly returned
to its owner. The photographer mentioned the story to an associate, Safra, who
was sufficiently impressed to offer Maher a position as part of his 12-strong
medical team - the banker suffered from Parkinson's Disease.
The unworldly Maher spoke not a word of French. Safra, a Lebanese Jew with
Brazilian nationality who lived mostly in the south of France, was fluent in
French, English, Italian, Portuguese, Arabic and Hebrew. Maher was a tall,
slender man with an open manner. Safra was short and bald and enigmatic. Maher
had an ongoing property dispute with his next-door neighbour in upper New York
State. Safra owned a vast penthouse in Monaco and La Leopolda, the magnificent
villa in Villefranche built on the estate that once belonged to Belgium's
genocidal King Leopold II. He also possessed homes in Paris, Geneva, London, New
York and Brazil.
In any other circumstances, the closest Maher might have come to Safra would
have been to cash a cheque in one of his banks. But, as it was, Maher left his
wife and three children in Stormville, New York, and his secure post at
Columbia-Presbyterian, and flew to the French Riviera and a $600-a-day ringside
view of the life of one of the world's richest and most mysterious men.
As far back as 1957, Edmond Safra was named as a drug trafficker in a US Bureau
of Narcotics report. The accusation was later withdrawn, but until his death
Safra was the inspiration for countless unsubstantiated rumours that linked him
to drug, gold and currency trafficking, money laundering and organised crime.
The Safra family came from the Halabi merchants of northern Lebanon, a
close-knit clan of Sephardic Jewish traders who historically made their money
from financing the camel caravans of the Middle East. Edmond's father Jacob
opened the family bank in 1920, building on the Safras' long experience in gold
and currency exchange. Sephardic tradition maintained that the family business
should be passed on to the oldest son. But such was his precocious interest in
banking that the young Edmond leapfrogged his elder brother, Elie, to be
selected by his father as the prime heir. At just 16, Edmond went to Milan to
learn the banking business and then on to Brazil, where he set up his first bank
at the age of 21.
In contrast to most banks, Safra's was built on deposits rather than loans. It
may be this strategy that originally led some observers to view Safra's banks as
attractive propositions for money launderers. Five years ago, New York magazine
ran an investigation into Safra's Republic National Bank in which it claimed
that the bank 'quickly became known on the street as a bank that would send an
armoured car to pick up large sums from its more secretive customers'.
In the 80s, Safra and Republic were the targets of a global whispering campaign.
Among the allegations that surfaced in a variety of mostly obscure publications
was the suggestion that he was involved in the Iran-Contra affair; that he
arranged the murder of a security specialist who had supposedly discovered a
link between him and the arms-for-hostages scandal; that he had double-crossed
the Medellin cocaine cartel; that he was a confrère of mafia legend Mayer
Lansky; and that Republic had laundered the drug-trafficking profits of Panama's
Only the last claim had any basis in established fact, and Republic was only one
of a number of banks that held Noriega's funds. Eventually, Safra proved in
court that the rumours emanated from his corporate rivals, American Express,
which had bought Republic's Swiss parent company, TDB, in an acrimonious deal in
1983 (Safra regained control in 1988). American Express was forced to apologise
and donate $8m to a number of charities, including the Anti-Defamation League.
For many people in and around the world of banking, however, Safra's legal
victory served only to increase their suspicions of the secretive Lebanese
businessman. In New York and London it was customary to grin in a knowing
fashion whenever Safra's name was mentioned. Now the grins were that much wider.
Bryan Burrough ascribed the slurs aimed at Safra to anti-Semitism in his book
Vendetta: American Express and the Smearing of Edmond Safra . But if
anti-Semitism alone was the reason for the stories, then why was Safra singled
out and not the innumerable other Jewish bankers operating in high finance? It
would be rather as if Michael Jordan had been selected for racist abuse on
account of being a black player in basketball. Whatever the true explanation for
the attacks, Safra was acutely sensitive to their effect on his good name. He
was determined to sue any publication, however small, that repeated the libels.
While American Express was waging its smear campaign, American customs officers
were investigating Safra's banks for laundering Colombian drug funds. No charges
were brought. Yet when the news emerged that Safra was dead, the prime suspects
were not embittered former American Express executives or Colombian drug lords,
but the Russian mafia, or mafiya .
Three factors pointed in its direction. First, Republic's dealings with Russia
were well documented. Under licence from the US government, Republic shipped
around $10bn of US currency a year to Russian banks. Although perfectly legal,
the shipments caused no little consternation among some state agencies. The
problem was that many banks in Russia, and up to 50 that Republic was trading
currency with, were suspected of being at the very least unreliable and quite
possibly fronts for the mafiya. Referring to this apparent criminalisation of
cash, a source from the Criminal Investi gation Bureau of New York State Banking
Department told New York magazine: 'To us it was like a sore on Cindy Crawford's
Second, at the time of his death, Safra was engaged in the protracted and
problematic sale of Republic to HSBC. There were various hold-ups, but one of
them was said to be the Russian accounts that were frozen as a result of Federal
investigation into money laundering, which Republic itself prompted by alerting
the authorities to its concerns. Observers speedily concluded that a
short-changed mafiya chief had sought revenge. Some 90 or so bankers have been
killed in Russia since the collapse of the Soviet Union. 'What you have to
understand,' Stephen Handelman, an expert on the mafiya and author of Comrade
Criminal , told me, 'is that bankers are different in Russia. Over 2,000 banks
were set up after 1989, most of which have since collapsed, and many of the
people behind them had emerged from the black market and criminal backgrounds.
So often when a banker is killed he may himself be involved in the mafiya.'
And third, the French Riviera, which enjoys a rich history of Russian influence
dating back to 19th-century aristocrats, had seen a sudden and ostentatious
influx of newly wealthy Russians. Tales of Moscow businessmen buying yachts and
property for cash formed the gossip of sales people from Cannes up to Menton,
who, while often offended, seldom refused the money. In Nice, the mafiya was
said to have bought into the exclusive Marina Baie des Anges, where the head of
one Russian crime gang was arrested with false papers and fled to Monaco. In the
past three years, Monaco has itself expelled 15 Russians suspected of illegal
business practices, including a former KGB colonel. And some lawyers say that
Monaco has now adopted an unofficial policy of refusing entry to all Russians.
Arnaud Montauibourg, a French MP who led a parliamentary investigation into the
mafiya, thinks the mafiya has already 'penetrated Monaco', laundering money
'through real estate, the casino and through trusts'. Sitting outside the Café
de Paris in Monte Carlo on a soft autumn evening earlier this month, watching
the hopefuls making their way to the casino, it was not hard to spot the Russian
businessmen. They have little apparent fear of cultural stereotyping. Thus two
men with gold bracelets and neck chains sat drinking vodka and smoking weighty
cigars, largely ignoring their two women companions whose compliant demeanour,
polite laughter and visible stocking garters made it plain that they were part
of the night's entertainment bill.
It's this kind of egregious behaviour that has placed the Russians, whether
legitimate business people or not, at the centre of a near moral panic
hereabouts. The Russians are coming, is the anxious chorus on the Cte d'Azur,
and everyone assumed they had come for Safra.
At 5am on the morning of 3 December last
year, Ted Maher awoke his boss with news that two masked men had broken into the
belle époque building at 17 Avenue D'Ostende in Monaco. Maher was bleeding from
three stab wounds. Although a former Green Beret, Maher had served as a medical
auxiliary. He had no more experience of combat than he did of high-style living.
He was there to tend his employer, not protect him. For that, Safra had his
Israeli army bodyguards. But not in Monaco. So safe did he feel in his penthouse
next to the renowned Hotel Hermitage, that he maintained the security team at La
Leopolda, 10 miles away.
It was there during the 80s that Safra, under the guidance of his Brazilian
socialite wife, held celebrity-enriched parties of daunting splendour. Lily,
whom Safra married in 1976, had three children from a previous marriage and was
independently a very rich woman. Nevertheless, the prenuptial agreement she
signed was said to have run to 600 pages. It was she who ensured that names such
as Aristotle Onassis and Frank Sinatra were included on the Safras' guest list.
John Fairchild, the arbiter of American high-society standing, was moved to
speak of the couple's 'meteoric rise to social power'.
But social acceptance had not lessened Safra's near-phobic paranoia. He always
carried blue gemstones to ward off the evil eye, and retained an abiding fear of
curses. He was deeply superstitious about the number five and was terrified of
being kidnapped. So he must have been deeply scared early that morning when he
learned from Maher that the state-of-the-art security system in the building,
which also housed three banks, had been breached. Immediately, Safra retreated
with another of his nurses, 52-year-old Viviane Torrente, to his
Within minutes a fire broke out. This is how Monaco's assistant prosecutor
Catherine Le Lay described the scene: 'The apartment is immense, and within it
there are two separate wings, one for Mr Safra and one for his wife. Mr Safra
was in his wing, which consisted of three rooms - his bedroom, a nursing
laboratory and a bathroom. With him were two nurses. The police received a call
from the receptionist of the building. She had been alerted by the male nurse,
who had staggered from the apartment which occupies the fifth and sixth floors,
down to the ground floor. He had been injured with a knife with a six-inch
'The police arrived at the scene extremely quickly and when they arrived they
were un able immediately to access the apartment, which is protected by
steel-reinforced doors. When they did gain entry with the firemen, the fire had
already taken hold in the flat, which was extremely difficult to bring under
control. When the police were finally able to penetrate the flat, they found Mr
Safra dead where he had taken refuge in the bathroom with his nurse, Viviane
Torrente, who also died.
'His wife was not even roused by the drama. It is difficult to convey just how
big this flat is, but I have never seen anything like it. She was separated by a
good distance from her husband and each door was reinforced. By the time the
firemen had mastered the fire, smoke was only beginning to affect her wing of
the flat, which would have rendered her more deeply unconscious. We still don't
know how the attackers got into the flat, or how they escaped.'
Safra and Torrente died from smoke inhalation. The fumes reached them through
the fire-detection system. With its 500 officers, Monaco is probably the most
intensively policed square mile anywhere on the planet - the local constabulary
likes to boast that it can close down all exit routes from the principality in
minutes. Its border with France is only notional, but the police always man it.
Its streets and buildings are also the world's most intensively filmed.
Very few square feet remain unrecorded by the ubiquitous security cameras. But
there was no sign of the intruders. The idea that two men could break into the
heavily secured home of one of the world's wealthiest men, cause his death and
leave without trace did not sit well with Monaco's reputation as a crime-free
zone for the super-rich.
The police became convinced that it was an inside job. Within two days of
Safra's death, Maher was arrested. And, shortly afterwards, he told police that
he had stabbed himself and started a fire and that there were no intruders,
masked or otherwise. His actions, he said, were an attempt to gain his boss's
respect. He spoke of not getting along with the head nurse, a woman named Sonia,
and how he wished to circumvent her power by demonstrating his loyalty to Safra.
At a news conference, chief prosecutor Daniel Serdet quoted from Maher's police
statement: 'It was my own dark ideas which led me to do this.'
This was an extraordinary turnaround. From a story of high-financial corruption
and international gangsterism, it became one of a misguided approach to job
promotion. Police announced Maher's confession on 6 December, the same day that
Safra was buried in Geneva. Around 1,000 mourners attended the ceremony at the
Hekhal Haness synagogue, including the Nobel Peace laureate Eli Wiesel, Israel's
foreign minister David Levy, Prince Sadruddin Aga Khan and former United Nations
secretary general, Javier Pérez de Cuéllar. Also, on the same day, the US
Federal Reserve approved the sale of Republic to HSBC Holdings, and four weeks
to the day after Safra's death the $9.85bn deal was completed, netting Safra's
heirs some $2.8bn. Could it really be that strange and that straightforward?
In America, the conspiracy theorists' medium, the internet, has been hot with
indignation. There is much talk of Maher's 'imprisonment as a scapegoat for
Russian money- launderers' and he is referred to as 'prisoner of war'. 'Please
help him,' runs one appeal, 'before he is killed by the Monaco government or the
responsible parties that did commit this crime and used Ted as a scapegoat.'
Much of the stuff is hysterically xenophobic, virulently right-wing and clearly
the work of delusional minds. Of course, that doesn't mean that Maher isn't a
fall guy. However, his defence team certainly do not see Maher as the victim of
a fiendish plot.
Georges Blot, Maher's Monegasque lawyer, has gone on record as saying that his
client started the fire and stabbed himself. 'The first words Ted said to me
when I met him were: "This is horrible. I loved him. I admired him. I respected
him. I don't understand why I did it."'
Maher's family in the US are unimpressed. They say that the internal security
videotapes, which they believe would prove Maher's innocence, have gone missing
(Monaco police say the video system was not working). And Maher's wife Heidi,
argues that her husband's legal defence is compromised because it is
state-appointed. 'The Monaco government is paying Ted's lawyer, Mr Blot, which
is clearly a conflict of interest,' she has said. In fact, that is common legal
practice, and indeed a human right, in most countries on occasions when the
accused cannot afford a lawyer. Yet while Monaco is not implicated in a
cover-up, there is a sense that it is actively presenting an untroubled face to
This is not the first time that a banker's death has caused a scandal in the
region. Back in 1990, Jean Ferry, an official of the Industrial Bank of Monaco
(BIM), was found dead from a bullet wound in the head. The police decided it was
suicide, but a subsequent investigation found that a client of Ferry had
constructed a large-scale fraud involving BIM. It also discovered that lax
practices encouraging foreign tax evasion were endemic within the Monaco banking
system. The most common method exploited a law which enabled foreign investors
to create 'shell' companies in the names of Monegasque citizens (for a small
payment). It has often been alleged that the system is abused by organised
Roger Bianchini, a journalist with Nice-Matin , told an author of a book on the
Grimaldis: 'The whole system is well known to the initiated. But when
underground deals begin to surface and scandal breaks through, Prince Rainier
becomes concerned that the image of the principality could be tarnished.'
As with other wealthy climes, such as Beverly Hills, the very sheen of Monaco's
surface leads the visitor to suspect some form of moral corruption lurking
underneath. The old wedding-cake architecture that survives is placed in the
shade by the huge apartment-block developments that Rainier green-lighted in the
60s, creating an odd combination of sickly innocence and brash confidence.
Although there is a refreshing sea breeze and the streets are neurotically
clean, the faintest smell of pollution hangs in the air alongside the sweet
fragrance of jasmine. And there is a disturbing sense that no amount of money
will wash it away.
For all its publicity-seeking glamour, Monaco thrives on secrecy. The government
and its institutions, such as the Société des Bains de Mer, which runs the
casino and hotels and much else, and which are all essentially arms of the
Grimaldi empire ruled by Prince Rainier, are unapologetically opaque. Bankers
may be attracted to secrecy, but so are storytellers. One of the more fanciful
ideas doing the rounds has it that the Grimaldi grip on Monaco includes
extensive telephone tapping based on a word-trigger system. 'If you said
something derogatory about a Grimaldi it would undoubtedly hit the trigger,'
suggests one observer.
Against this backdrop of fantasy, any explanation of events provided by Monaco,
the so-called Disneyland Dictatorship, would never be seen as the whole story.
And indeed there are inconsistencies. Even Safra's widow's lawyer, Marc Bonnant,
was concerned to ask that all the evidence be made available.
'We would like to have all the details of the nurse's confession. Was it
credible and complete, what exactly pushed him to do what he did, how many fires
did he set, are there any inconsistencies in his confession? A thousand
questions come to mind which need answers to make any sense out of this tragic
and absurd death.'
Among those questions, perhaps, are why did Safra remain in the bathroom even
after the police arrived and why did it take two long hours for the fire brigade
to get inside the bathroom? And why is it that Maher is said to have started
only one fire and yet investigators located two separate origins?
In early official reports it was stated - unambiguously by assistant prosecutor
Le Lay - that Lily Safra did not speak to her husband during his confinement in
the bathroom, that she was asleep. Elsewhere there were reports that she had
spoken to him on a mobile phone. Bonnant told me, 'Edward Safra spoke twice to
his wife, to his bodyguard and to the police.' Then why did he not emerge from
the bathroom? Bonnant says that everyone was still under the impression that two
armed intruders were in the building, which is also why the fire brigade made
But given the police presence and his own security guard, Safra must have been
paralysed with fear not to feel confident enough to come out. Who did he think
was after him? Bonnant is quick to scotch any talk of assassins. 'Look, if you
want to kill a man, you pay $20,000 and you get the job done the right way by a
professional. The right way is not to hire a nurse to start a small fire and
hope that the police take two hours to get to him.' An insider on Maher's
defence team echoes this point. 'People have told me they know for sure that
Safra was shot with two bullets. Now the defence is going to see the inside of
the building and we've asked for further fire reports and to look at video film
outside the home. It might be that we'll see two guys in balaclavas on top of
the roof, but I don't think so. And you have to ask, why were there no holes in
Ted's clothes where his wounds were? Did the intruders thoughtfully lift up his
shirt before stabbing him?'
Handelman also dismissed the idea that Russians were behind Safra's death. 'It
just wasn't their MO. Not outside Russia. Most people thought Safra was holding
IOUs or money for the mafiya, but they wouldn't have killed him for that.' But
he added: 'You can always be surprised.'
After Maher's confession was made public, people began to ask how Safra had ever
come to employ a man with such evident psychological problems. Suddenly it was
common knowledge that Maher had a prescription-drug problem - according to
Serdet - a history of violence and unstable personality traits. His colleagues
at Columbia-Presbyterian countered these stories and provided an image of a
reliable and motivated worker. 'He was really on top of things,' said one
paediatrician. 'In fact, he was one of the better nurses I've seen.'
Bonnant has said that Maher was properly vetted through 'in-depth background
checks', as well as being interviewed by Safra himself. 'The fact that Maher is
unstable became apparent to us only after the accident. Nothing in Maher's files
showed the slightest trace of mental instability.' Perhaps because it wasn't
Some newspaper articles quoted a former neighbour who quarrelled with Maher. 'He
was a miserable bastard,' said 70-year- old Leonard Levelle, who accused Maher
of physical assault. According to Maher's defence, Levelle himself was cautioned
a number of times by the police. Much was also made of Mayer's leaving the Las
Vegas police force after only three months. His defence say he quit because he
contracted spinal meningitis.
So was it a bizarre aberration? 'The reality of the situation is not something
Ted can articulate,' say his defence. But the same source believed Maher was
under pressure because his wife wanted him to return home and he wanted to stay
What even his detractors agree on is that Maher never intended to kill Safra.
'If he wanted to,' said Serdet, 'he would have had 10,000 chances a day.' The
fire simply got out of hand because he started it in an acrylic wastepaper
basket. However, Maher is currently charged on a count of arson leading to
death, a crime which carries a maximum life sentence.
In his Monte Carlo office, high above the Boulevard des Moulins, Donald Manasse,
an American-Frenchman who is assisting Georges Blot, told me, 'Ted is not guilty
of the crimes as charged and we are seeking a requalification of the charges.'
Optimistically, he might be looking at four to six years. But that's still a
very severe sentence for what basically amounts to an accident. Bonnant
demonstrated the Safra family's determination to gain what they see as justice.
He told me: 'We want to ensure that the one who caused this will be properly
The trial is unlikely to come to court until early next year. The investigating
judge, Patricia Richett is still conducting her inquiry. Given the profile and
importance of Safra, and the sensitivity of the Monaco authorities, fears have
been expressed by those close to Maher that the investigation might be partial.
Manasse was certain that Richett would not succumb to external pressure from any
direction. 'Anyone who would say she could be influenced by third parties,' he
told me, 'has no idea who she is.'
Maher, it seems, does have one influential supporter himself. Dominic Dunne, the
celebrated Vanity Fair writer and crusader against criminal injustice, is known
to be sympathetic towards his plight. And the Monegasques have taken due notice.
'When Serdet heard that Dunne was arriving in Monaco,' a legal source said, 'he
was practically saying, "We've got to get this right, Dominic Dunne is coming to
In the meantime, Maher, the man who wanted to gain attention, is locked up in a
prison that dare not speak its name, removed from his Mediterranean idyll, but
tantalisingly trapped a few feet from the sea. He has no visitors, save his
lawyers and the American consulate representative, and of course the tourists
passing unknowingly by on their way to see a different Monte Carlo story.
Life in Monaco continues as ever in its own secretive way. On a brilliant
morning with seagulls circling overhead and the roar of the Monaco Kart Cup
ripping around the bay, I stopped outside 17 Avenue D'Ostende. The fire damage
is now mostly repaired, and just to be certain, I asked a policeman where
Monsieur Safra had lived. He looked at me with a thin smile and said, ' Je ne
sais pas.' Then he walked away.
After Safra's burial, Eli Wiesel said of the close friend he often called his
brother: 'After all, what remains of a man after his death? It is his name, his
reputation, his honour.' And, a less circumspect man might have added, his
money. Already there is talk of family disputes about where it will go. And
there will continue to be talk about the banker from Beirut. For if Ted Maher
started the fire, there was always smoke around Edmond Safra.