JOSEPH SAFRA, BANKER SEEKING A SLICE OF THE BANANA BUSINESS
By Samantha Pearson
Some Brazilian billionaires are known for their lavish yachts, others for their silicon-enhanced young wives and extravagant lifestyles. Joseph Safra’s trademark has always been his silence.
The 75-year-old Sephardi Jew, who arrived in Brazil as a migrant from Lebanon in his 20s, is the world’s second-richest banker, with a fortune of close to $16bn, but his name is barely mentioned in his adopted country. He prefers it that way. As trusted financiers of camel caravans in the Ottoman Empire and guardians of the secrets of the super-rich from Geneva to São Paulo today, the Safra family has discreetly shaped the history of global private banking for more than a century.
So his decision to finance a $1.25bn takeover bid this week for US banana producer Chiquita took the business world aback. Every Safra deal is news to all but a clutch of insiders, known to ward off prying eyes by communicating in ancient Middle Eastern script.
Just as Chiquita and Ireland’s Fyffes were in the final stages of closing their $1bn merger on Monday, Mr Safra and the Cutrale family, Brazil’s leading orange producers, swooped in with an offer to buy the US company for $610.5m and assume all its debt. Chiquita rejected the proposal on Thursday but the chieftain of the Safra empire is unlikely to be easily deterred.
It is a bid that has captured the imagination of the business world, in which bananas have long been a source of fascination. Like the Safra family itself, the most widely grown fruit has been affected by wars, trade disputes and scandal.
Indeed, Mr Safra has not always been able to distance himself from the intrigues of the world of power and money. He was distraught when the Safra name was linked to the investing of clients’ money in the $65bn Bernard Madoff Ponzi scheme in 2009. Ten years earlier, his family endured a distressing whodunnit when his brother, Edmond, was killed in a mysterious arson attack on his Monte Carlo penthouse.
The Safra banking empire began in Syria with Joseph’s great-uncle, Ezra, who financed trade between east and west. In 1920 Mr Safra’s father, Jacob, opened a bank in neighbouring Lebanon, instilling a philosophy of caution that has typified Safra operations ever since.
Even the Chiquita bid, an apparently bold move in a struggling industry, was meticulously analysed and timed. The Cutrales, close friends of the Safras, had long eyed the acquisition but pounced only when a US court finally dismissed a lawsuit over Chiquita’s dealings with Colombia’s rightwing militia, according to people close to the deal.
The signature Safra caution failed the family in the wake of the second world war. With the emergence of the state of Israel and persecution of Beirut’s Jews, Jacob sought refuge in Brazil. “My father thought it wouldn’t be long before a third world war broke out,” Mr Safra once explained. Edmond, seven years his senior, quickly moved on, founding banks in Geneva and New York. The Safras seemed to have the Midas touch. As they liked to point out, the name in Arabic means “yellow” and – at a push – “gold”.
But Edmond’s story ended abruptly in 1999, when he died of asphyxiation in his bathroom. At the time even the Russian mafia and Islamists came under suspicion. In 2002 his American nurse was convicted of starting the deadly fire but to this day some friends of the family remain unconvinced.
HSBC snapped up his holdings including the Republic National Bank of New York for about $10bn in a deal that was arranged shortly before his death, doubling HSBC’s private banking business.
If one of his executives hits a rocky patch in his marriage, Safra will sometimes buy the wife jewellery to apologise for keeping her husband at the office
Back home in Brazil’s business capital, Mr Safra is said to be, understandably, more security conscious than ever. But his family hires Brazilians rather than former Mossad agents as bodyguards these days, he said in a rare interview. Having opted to build his fortune in Brazil, he is now its second-richest person. His conservatism has made him the butt of jokes among Brazil’s more daring bankers: he is the kind of man who lends only to people who do not need the money, one scoffed once to a local news outlet. His Safra investment group has amassed more than $200bn in assets under management, from property and banks to telecommunications and, if his plans bear fruit, bananas.
It is a fortune he is in the process of passing on to his sons (he has three with his wife, Vicky, and one daughter). According to local media, he had planned to retire a few years ago – but then the global financial crisis hit, and with it claims that the money of some of Safra Group’s clients had been ensnared in Madoff’s fraudulent web. Disbelief, anger and legal disputes followed.
After half a century in Brazil José, as he likes to be called, is an avid football fan, supporting the local Corinthians team. As cautious in his personal life as in business, he swims religiously at his estate in São Paulo’s Morumbi neighbourhood – where gated communities rub up against one of the city’s biggest favelas – to keep his heart in check. “If I could go back in time I wouldn’t have built such a big house,” he once said, saying he felt guilty for living in a palace while many families suffered in poverty.
He prefers not to spend his money on himself. According to Epoca magazine, if the marriage of one of his executives hits the rocks, he will occasionally buy the wife jewellery to apologise for keeping her husband in the office for such long hours. He has also funded the building of a luxurious synagogue in São Paulo and donated Rodin sculptures to one of the city’s public art galleries. Perhaps the family’s most extravagant present, though, from the Jacob Safra Foundation, was Albert Einstein’s original manuscript on the Theory of Relativity, which was donated to the Israel Museum in Jerusalem.
He has never shown as much interest in yachts as his fellow billionaires. For him the Safra banking empire is the only vessel of interest, to be steered with care and not for pleasure. His father’s advice is now enshrined as the group’s motto: “If you choose to sail upon the seas of banking, build your bank as you would your boat, with the strength to sail safely through any storm.”