My Life Storyby MirMAK
It all Started from Karachi!
I was raised in a very educated family in Karachi. A family full of Ph.D’s, Doctors, Lawyers etc. I have had a very happy and fulfilled childhood. My parents gave me the two best things a child could ask for, one: A lot of love and care, two: the best education one can ask for. I graduated from an Irish Catholic Missionary High School in Karachi. I was absolutely fortunate enough to receive quality education in a country where other fellow children could rarely afford to attend schools because of financial constraints. Owing to better grades in my class, I was promoted twice, once from 5th grade to 7th grade and again from 7th to the 9th grade. Karachi at that time was very peaceful and full of life and children had fewer restrictions from their parents. This enabled us to do quite a few things on our own which resulted in a higher level of confidence as children. We travelled to the schools on our own, went for tuitions on our own, went to the parks and sports arenas alone, it taught us to be self-reliant. It brought humility and humbleness in our character.
As far back as I look, I find that whatever I accomplished in life had a great deal to do with the way my parents brought me up. Positivity, encouragement, emotional support, optimism, and discipline were just few of the things I remember in the earlier part of my life. I was not a very athletic child except for swimming, horseback riding and some occasional sports here and there. This left me with a lot of time on my hands while other kids were out playing cricket and other sports, I spent my time reading comic books etc. Inadvertently I became an avid reader and I think this lead me to excel in my education as well. Since I graduated two years earlier than my peers from High School, I went to college two years earlier than others also. I studied Physics and Math for the first two years and later on changed my major to Finance and Economics. I fell in love with Finance. I took every possible course, Elective or Major, just to gain more knowledge of the financial world and the global economies. Back in my college days there was no internet in the late eighties, so we all had to rely on the books from our college library. A great deal of my time was spent in the library reading books on finance and the Capital Markets became my passion.
America and Wall Street: Early Days
My family moved to America when I was in my mid teens. My family, being a new entrant into the American way of life, had to struggle like all the other immigrant families. We had our share of financial woes. But one thing that amazed me was the resolve of my parents through those times of difficulties settling into a new culture and society. More so because both my parents were born into very wealthy families. My maternal Grandfather, Syed Ali Asghar Bilgrami, was the Governor General of the Province of Aurangabad, India and the Paternal side of the family, my father Mir Abid Alikhan, were the Mirs of Deccan, from the family of the Nizam Of Deccan, Mir Osman Alikhan. Yet never did I see a hint of irritation on my parents faces from such hard work, who in reality were both raised with silver spoons in their mouths. Seeing this amazingly positive attitude, my siblings and I were determined to succeed no matter what.
Going through University, I held all kinds of odd jobs to support myself. I still remember those years, my first job in America was washing dishes and cleaning tables at Burger King on Easton Avenue in New Jersey. I drove taxis, punched tags in the apparel section of Kmart (Ironically the Chairman of Kmart, Joseph Antonini, few years later joined the Board of Directors of my Investment Bank that I started on Wall Street, worked as a security guard on the weekends, you name it and I did it to support my educational expenses.
From 7:30 a.m. to 3:30 p.m. I worked full time and attended my classes from 4:45 to 11:30, studied in the library till 2:00 a.m and the same routine the next day. Weekends were spent working 16 hour days at AT&T as a Desk Security Guard. I wanted a break into the banking system and after two years of this hectic working schedule, I landed a job at The People’s Bank in New Brunswick, New Jersey, as a teller while continuing my education. While working at the bank and attending my classes in the evening, the entrepreneur inside lead me to find a partner and open up two Movie Rental Franchises in New Jersey by the name of Prime Time Videos. I had become a business owner while I was a teenager and all this while I was still in college.
Part of Elite Investment Banking & Political Fraternity in America!
My first professional job was with the world’s largest financial services company at that time, The Prudential Financial Services. I was hired as a Trainee in Taxation & Estate Planning Division, at Woodbridge New Jersey. I finished my 18 month training in just 12 months by appearing for Series 6, 7, 64, 63, and 62. All in all I passed over 12 capital markets exams in my career, all the way to the CEO level. I was promoted to the management level but I was not very happy because I wanted to work on Wall Street and be in the middle of all the action of the Capital Markets. I moved from The Prudential Financial Services to its division, The PruBache, its Capital Markets Division at the Penn Plaza, New York. My Manager, Abe Bornstein, was one of the most shrewd Wall Street Professionals and I learnt a great deal from him in a very short period of time. Any Way, this is where my Wall Street Career began. I got hired by a smaller investment bank right on Wall Street as an assistant Vice President and I never looked back from that point onwards. Keep in mind that most of the sales side professionals on Wall Street work only on commissions, this could be a negative or a positive thing depending on the kind of personality you posses. For me it was very positive. It allowed me to control the financial destiny of my own life. Few years later I moved to another investment bank as a Senior Executive Vice President, International Investment Banking Division. I started to handle international clients and being a bi-linguist, it turned out to be beneficial for my career. The next step was to open up my own Boutique Investment Bank on Wall Street. And this dream too, by the Grace of God, came true in 1995. KMS Investment bank came into existence as the first Muslim owned investment bank in the history of Wall Street. By this time, I had gathered a few hundred million dollars of assets under Advisory & Management and had done over 40 or so investment banking deals, including IPO’s and secondary financing. Side by side I had started to take a keen interest in politics and I was one of the biggest contributors to the Republican Party. I always believed that Muslims in any country that they permanently settle into should become active in the Democratic process of that country to have their voice counted.
Amongst many other political achievements, I had also become the Member of the Governor’s Council, for the Governor of New Jersey, Christine Todd Whitman, and also a member of the Republican Presidential Task Force, first Pakistani ever to have had these honors in America.
As my career progressed, I felt that something was still amiss.
Introducing Islamic Finance to America
I wanted to give something back to the people of my culture, religion and ethnicity, something more than just money. Life took a turn and I came across an article in a Middle Eastern Financial Magazine on Islamic Banking on one of my frequent trips to see my clients in the GCC. It caught my attention. I saw Islamic Banking not as just a vehicle of financial transactions for the Muslim but for every person, because the true spirit of Islamic Banking was “MUSHARIKA”, Mutual Participation of Investors in an investment program. This is what the entire Wall Street was doing anyway. Finding investors and matching them with Ideas to invest in. I immediately, upon returning from my trip, immersed myself into reading up on the basic tenets of Islamic Banking. Six months of meeting the scholars, Reading, talking to my colleagues on Wall Street, Speaking to my clients, came to a decision to open up a fully staffed Islamic Banking Division within my Investment Bank. I felt that there was a huge market in America and the Western world for Islamic Financial products, not just for Muslims but for everyone. No Financial institution in America was willing to invest in this venture. One, because it was going to cost a few million dollars a year to staff it with professionals and two, because you would have to develop a market for these products yourself before you could see any return on your investments as an investment bank. Our regular investment banking activity was generating enough revenues for us to sustain a long term investment into Islamic Banking Market. I decided to go ahead with this idea. I put together a team of Non Wall Street Financial services industry professionals because I wanted this team to have fresh ideas, no preconceived notions of the inner workings of Wall Street. Amongst others, I hired a Business Development Executive from Mashreq Bank in Mid Town Manhattan by the name of Rushdie Siddiqui who later on went from my investment bank to head the Islamic Banking Benchmark Index that we developed as our first product, with Dow Jones Indices.
Our first product was KMS-SAMI ( KMS Socially Aware Muslim Index) which we launched at Harvard University Islamic Finance and Information Program, HIFIP, ceremony in 1998. It was covered by MEED (Middle Eastern Economic Digest), Khaleej Times, Gulf News, Financial Times, The Islamic Banker Magazine, and Newspapers in Bahrain, Qatar, Saudi, Oman, Jordan, England, America, India, Pakistan just to name a few countries. It was the world’s first Islamic banking Index which covered more than 38 Capital Markets around the world.
It was received an amazing welcome from almost every Middle Eastern Country. Newspapers were full of praise and the Islamic Scholars were praising the efforts we had put in. We subsequently came up with Equity Card, Mutual Fund, Islamic Product Back Securitization, just to mention a few ideas. And the price I paid for my success was also Islamic Banking. I made quite a few unknown and powerful enemies on Wall Street because I was trying to introduce something which had a potential market in early 1990’s of over $100 Billion dollars according to some estimates by Wall Street Journal at that time. In other words, every dollar being put into Islamic banking meant a dollar less for investments in the conventional products on Wall Street. Also because our first financial product, Islamic Equity Index, itself was so revolutionary that it became a threat to many who were against Islamic Banking to be introduced into mainstream America. You can guess who those people or institutions or Governmental bodies they might have been who opposed even the mention of the word “Islamic” in the same sentence as Wall Street. The old saying “When you cannot attack a man’s accomplishments, attack his reputation” had begun to show its ugly face in my professional life. My professional life was becoming almost impossible to deal with. I was young, I was full of zest for life and I never thought that one cannot change the ‘System’. An individual is no match against institutional and governmental powers. Anywhere in the world, be it America or any other country. Looking back I realize today that I had also opened up multiple fronts at one time and had spread myself too thin.
Bringing out IPO’s every month, Financing Private Placements, Trading departments of Equity and Debt instruments, Investment Advisory Department watching over a few Billion Dollars around the world, and to top it all off, the most time consuming yet thought occupying, revenue less exercise of coming up with Islamic Banking Products on Wall Street, just managing the heads of each departments required hours upon hours of meetings every week. Adding to all this was travelling around America and giving lectures on Islamic Banking. An uphill battle because even to American Muslims, Islamic Banking was an alien idea at that time.
Challenges faced being a Muslim Investment Banker
Let me give you an idea of the challenges I faced being a Muslim Founder and CEO of an Investment Bank on Wall Street. Most of us came to notice the difficulties of being a Muslim very recently after some tragic world events. I believe that 95 percent of the people of any country are very open minded and tolerant. But I have also seen that the remaining 5%, if powerful enough, can ruin other people’s lives. That 5% could be Governmental Officials or huge corporation with vested interests in world economies with an ever growing desire to profit and rule. Once I started to promote Islamic Banking on Wall Street, I began to realize that I was losing colleagues and losing deals albeit at a very slow rate in the beginning. Without naming anybody, I was warned over and over again to contain my activities but I think I had gone so deep into it that turning back was not an option, even if I had wanted to. I began to pull away from public appearances and lectures to create a temporarily visible distance but the team I had put together was coming up with innovation on top of innovations in Islamic Banking for that part of the world, and this created further complications.
Just to add a comment, so that the readers can understand, on Wall Street, it is almost impossible not to have been sued or complained against by your clients when market goes the other way. Because U.S. Securities laws allow for clients to sue you for three times the money lost and there are hundreds and hundreds of securities lawyers in America who would take the case on contingency basis on behalf of the investors. Meaning, the lawyer only gets paid if he wins the case for the client. This in turn makes a client “always ready” to sue his brokerage house or his financial advisor because the client has nothing to lose. You lose a million dollars in the market and you can sue for $3 million dollars. If you win and if the lawyer even takes 30 percent, you are still left with $2 million dollars, double of what you lost in the market. An absolute win win situation. Under these circumstances only a few financial professionals are left without ever having been sued or to have been taken to arbitration by the clients. And I was one of them. I had never been sued or faced any arbitration in my entire career on Wall Street. This fact also gave me immense confidence that I had an impeccable reputation, thus nothing to worry about. Little did I understand that the threats I was facing in my career at that time were not going to be from my clients but forces that were too big for me to understand at that young age of 31 years.
Losing Fortunes: Price I Paid for Promoting Islamic Banking
The Investment Bank had grown consistently year after year. I had merged the bank into a holding company I had set up with the intentions of taking the parent company public and listing it onto an exchange. The regulation, which in my view was fair enough, prohibited an investment bank to take itself public or even give a valuation to your investment bank. You needed an independent and well established investment bank to do your valuation and agree to act as the lead underwriter for your IPO. This was done in order to prevent you from giving yourself a very high valuation. There were just a few investment banks in America at that time older than two decades. We had to find an investment bank in that category to get a fair valuation for ourselves and for them to agree to act as our investment bankers and take us public. After much hard work, we found Kashner Davidson, a 40 year old Florida based investment bank and they agreed to take us public after looking at our numbers and our business plan. The independent valuation given by Kashner Davidson to our investment bank was $150 million dollars. 10 million shares at $15 dollars a share. As the founder and chairman of the board of directors, I was left owning 80 percent of the stock of the company. You do the math to see what the networth of the holding company would have been the day we went public. We had indications of 5 times oversubscription of the deal from our overseas clients alone. We were offering 2 million shares to the public at $15 a share and clients had indicated a desire to buy over 10 million shares. This would have resulted in the stock going up many times the day of the IPO. Every $1 the stock would have gone up, the investment bank would have gained ten million dollars in valuation. A $50 stock would mean the investment bank was worth $500 million dollars.
The growth prospects of the company were given a further positive nod when Joe Antonini, the Chairman of Kmart, Borders Book Store, Home Depot, a $32 Billion dollar conglomerate joined the Board of Directors of my holding Company, without any compensation. It was an absolute honor. Leonard Yablon, President of the Forbes Empire also joined as a non compensated Director on the Board along with Ed Heil, Partner at Delloite & Touche, Willie Mays, The Hall Of Fame Baseball Legend also joined the board along with 7 other notable businessmen of America.
I was planning to consolidate and take over other smaller investment banks through the holding company, once it was public, and Start an Online Investment Bank. Technology was very new to Wall Street at that time and there were hardly any investment banks based on a technology platform. Ours would have been the first one.
An investment bank already had tremendous reporting requirements under the guidelines of SEC and NASD and State regulations. One’s Intention of taking an investment bank public was an absolute attestation of your will to make your operations even more transparent. And this is exactly what I had wanted. I wanted to publicly list the company onto an exchange because it would have been more difficult for anybody to disrupt our operations and growth activities as a listed entity.
I was winning the battle in my view. Increasing revenues, the most respected Board Of Directors, Excellent Growth prospects, expansion of international operations and most importantly, Islamic Banking Activities were taking shape. Little did I know that I may have won a few battles but I was about to lose the war.
I had been travelling frequently out of the states and around the world, especially the GCC, promoting the upcoming IPO of our company. Building momentum back home were our lawyers who had fulfilled all the regulatory requirements with all the authorities.
Just a few weeks before we were supposed to go public, in my absence, I was told that authorities had come and without showing ANY CAUSE, had taken all the records and the hard drives from the office. No spirit of the law was followed. Absolute harassment was being thrust upon us. By this time it had become clearly evident that we would not be allowed to take our company public. My lawyers had indicated that they had never seen such prejudice before. And we had the top 3 Investment Banking law firms of America representing our IPO.
It had become absolutely impossible to continue conducting business under these circumstances. Undue pressure was coming from every direction from the corridors of power. We did not know who to fight and where to begin our protest. Behind all this was the New York State Attorney General of that time, Eliot Spitzer. Just his name alone can tell you his discomfort towards our Islamic Banking Efforts. This was the same Person who became the Governor of the State Of New York a few years later and was arrested for being involved in a prostitution ring by the authorities and had to resign as a Governor in disgrace. I had been on the record in many of my interviews around the world in early 2000 that Eliot Spitzer was a person of no character, and I had based my opinion on facts and years of interaction of people who had known him very closely. But at that time my protest had sounded like I was talking out of my anger for what was being done to me. The whole world came to know the truth just a few years later about the character of this person. I felt vindicated. Yet I had lost everything I had ever worked for in my life. My passion, Capital Markets, investment bank, everything was taken away from me. Anybody who knew me knew the strength of my character. As I began to fight back, certain tragic world events took place in the year 2001 and my chances of winning the case as a Muslim Investment Banker based on Wall Street, in Manhattan, a few blocks away from the center of the unspeakably horrific events, had visibly diminished.
My investment bank had closed its doors in February 1999. In October 1999, General Pervez Musharraf had come into power. The same month, I was offered a position in his Government as a Federal Advisor, Member of the think tank, National Reconstruction Bureau or NRB for short. I accepted the position with grace because I felt it was an absolute honor and the work was extremely challenging and thought provoking. Nine months had passed since the investment bank was forced to close its door. The moment I joined the Government of Pakistan in Islamabad as an Advisor, New York Times came out with an absolute rubbish article about me. It seemed like they were waiting for me to begin to put my life together and the moment I was in a powerful position again, slandering of character had begun again. I was featured on the front Page of the business section of New York Times, the entire page was dedicated to my story. The strange thing was that it was the 1st edition of the new millennium, published January 2nd 2000. According to some estimates, the advertising rates for half the front page of the millennium issue newspaper of NYT were in millions of dollars. It didn’t make any sense to publish a stale news article unless millions of dollars were being spent to defame me. This defaming and derogatory article called me “A Fugitive Financier”. Israeli and Indian newspapers jumped on the bandwagon. Rediff.com, an Indian website, spewed hatred by publishing the same twisted story and adding much more to it for the satisfaction of the Indian masses. But the Government, people and the journalistic community of Pakistan supported me thoroughly. Hamid Mir was the first journalist to interview me and printed my interview in its entirety on the front page of his newspaper, Ausaf. Every known journalist and almost all newspapers in Pakistan carried my interviews. Gulf newspapers and Magazines, Qatar Times, Gulf News Friday Edition, Khaleej Times and several Arabic papers gave me coverage. “A Fugitive Financier”?? Logically I came to this conclusion:
A fugitive DOES NOT come into the limelight because a fugitive is supposed to hide by the nature of the definition itself. Secondly, he DOES NOT take up a prominent and globally recognized position as an Advisor to the Government, specially a NUCLEAR STATE like Pakistan. A Fugitive DOES NOT travel to every country around the world because he fears apprehension. A fugitive DOES NOT establish offices in London, Dubai, Paris and Rome because he should be in hiding. Which leaves this article as a biased piece meant to only defame my character to the point where establishing a business or going back into the Capital Markets becomes suffocating and difficult for me. However, I decided to focus and leave my fate in the hands of Allah. Time proved the reality of my character. 15 years have passed since these articles came out and today by the grace of Allah I can say that I have come out as a winner. I have made more friends within these 15 years around the world than I had ever before. I have done more deals globally in the past 15 years than I had done ever before.
Rebuilding Life in Dubai
In early 2001, after serving Pakistan, I decided to move to Dubai because I wanted to set up a venture capital firm. God gave me that opportunity and in Partnership with one of the most well known families of UAE, I began to buy out technology companies.
Our first venture was taking over Focus Softnet. An internet city based Software development firm with offices around the world. The second venture was TeckStoxx FZ LLC, a telecommunication equipment provider. Then came an opportunity to acquire PGM London Limited. PGM with offices in Dubai, London, Paris and Milan, traded in Platinum. After this venture, we never looked backed. I was able to get back on my feet but some personal tragic event I went through in early 2004 left me scarred for some time to come. I threw myself deep into writing and finished my Auto Biography which will be published soon.
I was also bestowed with the privilege of raising two young sons as a single parent and I feel that this responsibility for the past 9 years has made me into a better person. Now that both my boys are in the teens and about to start college in a few years, I have decided to get back into the capital markets again. But this time around I have a higher interest in teaching and developing knowledge based platforms for financial services industry. Work has already begun on a first of its kind idea for the regional capital markets, which will then be implemented in the Asian Markets. I believe that there is a huge potential in the young minds of Pakistan and the region. Somebody with international financial markets experience needs to guide them into developing innovative financial products. I am a very big believer in the potential of our country, Pakistan.