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Thread: The Pirate Stock Market

  1. #1
    Board Crasher Jason California's Avatar
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    Mar 2005

    The Pirate Stock Market

    By Mohamed Ahmed
    HARADHEERE, Somalia (Reuters) - In Somalia's main pirate lair of Haradheere, the sea gangs have set up a cooperative to fund their hijackings offshore, a sort of stock exchange meets criminal syndicate.

    Heavily armed pirates from the lawless Horn of Africa nation have terrorized shipping lanes in the Indian Ocean and strategic Gulf of Aden, which links Europe to Asia through the Red Sea.

    The gangs have made tens of millions of dollars from ransoms and a deployment by foreign navies in the area has only appeared to drive the attackers to hunt further from shore.

    It is a lucrative business that has drawn financiers from the Somali diaspora and other nations -- and now the gangs in Haradheere have set up an exchange to manage their investments.

    One wealthy former pirate named Mohammed took Reuters around the small facility and said it had proved to be an important way for the pirates to win support from the local community for their operations, despite the dangers involved.

    "Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 'maritime companies' and now we are hosting 72. Ten of them have so far been successful at hijacking," Mohammed said.

    "The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials ... we've made piracy a community activity."

    Haradheere, 400 km (250 miles) northeast of Mogadishu, used to be a small fishing village. Now it is a bustling town where luxury 4x4 cars owned by the pirates and those who bankroll them create honking traffic jams along its pot-holed, dusty streets.
    Somalia's Western-backed government of President Sheikh Sharif Ahmed is pinned down battling hard-line Islamist rebels, and controls little more than a few streets of the capital.

    The administration has no influence in Haradheere -- where a senior local official said piracy paid for almost everything.
    "Piracy-related business has become the main profitable economic activity in our area and as locals we depend on their output," said Mohamed Adam, the town's deputy security officer.

    "The district gets a percentage of every ransom from ships that have been released, and that goes on public infrastructure, including our hospital and our public schools."
    In a drought-ravaged country that provides almost no employment opportunities for fit young men, many are been drawn to the allure of the riches they see being earned at sea.
    Abdirahman Ali was a secondary school student in Mogadishu until three months ago when his family fled the fighting there.
    Given the choice of moving with his parents to Lego, their ancestral home in Middle Shabelle where strict Islamist rebels have banned most entertainment including watching sport, or joining the pirates, he opted to head for Haradheere.
    Now he guards a Thai fishing boat held just offshore.

    "First I decided to leave the country and migrate, but then I remembered my late colleagues who died at sea while trying to migrate to Italy," he told Reuters. "So I chose this option, instead of dying in the desert or from mortars in Mogadishu."

    Haradheere's "stock exchange" is open 24 hours a day and serves as a bustling focal point for the town. As well as investors, sobbing wives and mothers often turn up there seeking news of male relatives missing in action.

    Every week, Mohammed said, gang members and equipment were lost to the sea. But he said the pirates were not deterred.
    "Ransoms have even increased in recent months from between $2-3 million to $4 million because of the increased number of shareholders and the risks," he said.

    "Let the anti-piracy navies continue their search for us. We have no worries because our motto for the job is 'do or die'."
    Piracy investor Sahra Ibrahim, a 22-year-old divorcee, was lined up with others waiting for her cut of a ransom pay-out after one of the gangs freed a Spanish tuna fishing vessel.

    "I am waiting for my share after I contributed a rocket-propelled grenade for the operation," she said, adding that she got the weapon from her ex-husband in alimony.

    "I am really happy and lucky. I have made $75,000 in only 38 days since I joined the 'company'."

  2. #2

  3. #3
    Gunsel RyanP's Avatar
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    Mar 2005

    Re: The Pirate Stock Market

    Just wait until their market crashes, it'll be chaos over there.

  4. #4
    Consiliere Andreas's Avatar
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    Mar 2005

    Re: The Pirate Stock Market

    Two words: air raid.


  5. #5
    Right Guy The Crushtacean's Avatar
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    Nov 2008
    The second floor, by the dumpsters

    Re: The Pirate Stock Market

    Well, that is an interesting solution in a country where droughts kill the crops, illegal fishing steals the fish, war destroys the infrastructure, people who try to leave are killed, and nobody has any food, money, or jobs.
    "If we met, Rulk would go to shake my hand and I'd just stare at him with my hands in my pockets. Rulk, we will never be cool."
    - Brandon Graham

    Quote Originally Posted by Canadian Todd (for Canadians) View Post
    You can be as straight as ol' Abe Lincoln, but if you suck enough, a dick is bound to slip in. It's the law of averages.

  6. #6
    Board Crasher Jason California's Avatar
    Join Date
    Mar 2005

    Re: The Pirate Stock Market

    So now they are buying real estate.

    Pirate cash suspected cause of Kenya property boom

    By TOM ODULA, Associated Press Writer Tom Odula, Associated Press Writer – Fri Jan 1, 2:01 pm ET
    NAIROBI, Kenya – Property prices in Nairobi are soaring, and Somali pirates are getting the blame.
    The hike in real estate prices in the Kenyan capital has prompted a public outcry and a government investigation this month into property owned by foreigners. The investigation follows allegations that millions of dollars in ransom money paid to Somali pirates are being invested in Kenya, Somalia's southern neighbor and East Africa's largest economy.
    Even as housing prices have dropped sharply in the United States, prices in Nairobi have seen two- and three-fold increases the last half decade.
    "There is suspicion that some of the money that is being collected in piracy is being laundered by purchase of property in several countries, this one being one of them," said government spokesman Alfred Mutua. "Especially at this time when we are facing global challenges of security such as terrorism and others, it is very important for us to know who is where and who owns what."
    The investigation will also help the government catch tax evaders, he said.
    Kenya may be the most attractive spot for pirates to launder their money because it shares a roughly 500-mile (800-kilometer) border with Somalia and has investment opportunities and a large Somali community of up to 200,000 people, Mutua said.
    In a neighborhood of Nairobi now called "Little Mogadishu" because of its Somali community, large business and apartment buildings have sprung up. A similar explosion of real estate development can be seen in higher-income areas of the city.
    Somali pirates have been paid more than $100 million in ransoms the last two years, said Roger Middleton, a piracy expert at the London-based think tank Chatham House. The average ransom is also up, from $1 million per vessel a year ago to about $2 million today.
    Pirates in Somalia say they invest their ransom money outside their war-torn country, including in Kenya. One pirate who gave his name as Osman Afrah said he bought three trucks that transport goods across East Africa. A second pirate, who only gave his name as Abdulle, said he's investing in Kenya in preparation for leaving the pirate trade.
    "Pirates have money not only in Nairobi but also other places like Dubai, Djibouti and others," said Abdulle. "I have invested through my brother, who is representing me, in Nairobi. He's got a big shop that sells clothes and general merchandise, so my future lies there, not in the piracy industry."
    Kenya also does not have stringent laws against money laundering, though a bill to curb the practice is being debated in parliament. The U.S. State Department in its annual report by the Bureau of International Narcotics and Law Enforcement Affairs describes Kenya as major money laundering country.
    The investigation has drawn angry reactions from the Somali community, and business leaders said Somalis would not cooperate with the investigation and may go to court to try to stop it.
    "This is very, very unfair discrimination," said Hassan Guled, the chairman of the Somali business community. "We consider this order rubbish."
    Guled said Somalis living in Kenya have acquired property by pulling resources together and borrowing from banks. Somalis here also depend on money sent by a large Somali population in Europe and America who cannot invest in those economies because of religious beliefs, Guled said.
    Bellow Kerrow, a former member of parliament and a Kenyan national of Somali descent, said it is high demand, not money from piracy, that is behind the rise in property values. But Pius Khaoya, a real estate agent, said factors outside the economy are influencing property prices.
    "The prices have gone through the roof and it does not tally with the performance of the country's economy," said Khaoya, who works for Crystal Real Estate.
    Khaoya said under normal circumstances in Kenya, it would take 10 years for property values to double, but that real estate prices have tripled in the last five years.
    A real estate agent who spoke only on condition he wasn't identified so as not to draw the wrath of Somali customers said some Somali businessmen pay double a property's worth just to easily and quickly complete the sale.
    Such a market puts home ownership out of reach for some Kenyans. Frank Mbata said he left college 15 years ago with a plan to climb the corporate ladder and buy his dream home in Karen, a leafy up-market Nairobi suburb.
    But because of a huge rise in property prices, a four-bedroom home in Karen that would have sold for $200,000 five years ago sells for $500,000 today.
    "This is something I was aspiring for, but today it is not possible unless something drastically changes," Mbata said.
    Associated Press reporter Mohamed Olad Hassan in Mogadishu, Somalia contributed to this repor


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