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The rise and fall of Rafik Khalifa, Algeria’s golden boy

At his peak, Algerian business tycoon Rafik Khalifa personified the hopes and dreams of a nation. But since his fall from grace, Khalifa has been fighting extradition back to his homeland.

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He was the golden boy in his native Algeria, a business hero who personified the aspirations of a nation emerging from a brutal civil war into a globalized market economy. That is, until his downfall, when the collapse of Rafik Khalifa’s fortunes was just as sudden as his meteoric rise.
 
On Wednesday, the British home secretary, Alan Johnson, ordered the extradition of the former banker to Algeria, where he has been sentenced to life in prison for massive embezzlement.
 
Khalifa has been residing in the UK since 2003 and has spent the last three years in a British jail, from where he is currently fighting his extradition order.
 
Responding to Wednesday’s extradition order, Anita Vasisht, Khalifa’s London-based lawyer, told reporters that her client intended to file an appeal against the order.

A private jet, expensive suits, friends in high places

The son of a former Algerian minister, Khalifa built up a €1 billion business empire that extended into banking, construction, aviation, media and the sports industry. His companies included the El Khalifa Bank, Khalifa Airways, the France-based Khalifa TV network and a high-profile sponsorship of the French football club Olympique de Marseille.

 
Khalifa emerged as a very public figure in the late 1990s, just as Algeria was emerging from a bloody decade of civil war – or “the dirty war” as Algerians call it – that pitted Islamist militants against the state's shadowy security forces.
 
For many Algerians, he personified the aspirations of their embattled nation, a symbol of what they hoped would be Algeria’s emergence from a decade of violence and an opening up to the market economy.
 
He certainly bore those aspirations with flair, wearing a trimmed goatee beard and expensive suits. Khalifa had an ability to float effortlessly between the worlds of business, high society, sports stars and politicians.
 
His high-profile social circle included French cinema stars Gerard Depardieu and Catherine Deneuve and pop singers Bono and Sting to name just a few. He traveled in a private jet called the Challenger and owned prime properties across France.
 
But even at his prime, there was a dichotomy between how he was perceived by the Algerian elites – in Algeria and France – and by ordinary Algerians.
 
For members of the Algerian elite – and in French public opinion – there was always a hint of something fishy in the newcomer’s rapid rise. In an economy tightly controlled by the state like Algeria's, Khalifa’s business expansion was always viewed with suspicion.
 
But for many ordinary Algerians, he was a symbol of Algerian pride, of a homeboy who had made it big on the international scene.
 
Until, of course, the end began.
 
The fall from grace: €2 million in a suitcase
 
In many respects, Khalifa’s downfall was as high profile as his rise. The end, when it arrived, came in the form of a suitcase stuffed with  €2 million in cash.
 
In February 2007, two of his close business associates were caught at the Algiers International Airport trying to leave the Algerian capital for Paris with €2 million in a suitcase – money destined for cash-deprived Khalifa affiliates in Europe. One week later, the Bank of Algeria appointed administrators to oversee El Khalifa Bank's operations, citing multiple "irregularities".
 
Behind the scenes, things were starting to unravel even before the airport incident.

Months earlier, Algerian authorities froze the assets of the El Khalifa Bank on suspicion that he was using money deposited in the bank’s savings accounts to finance his expanding business empire.

 
French intelligence was also monitoring him. A leaked French intelligence report from the early 2000s estimated that the conglomerate’s annual losses were around €500 million.
 
Shortly after the suitcase incident, Khalifa fled his native Algeria for London, where he has stayed for the past seven years.
 
In July 2003, a French commercial court ordered the liquidation of his French companies – that meant the end of Khalifa TV and Khalifa Airlines and the repossession of Khalifa’s 34 jets.
 
In 2007, an Algerian court tried him in absentia and sentenced him to life in prison for massive embezzlement.
 
He was arrested in the UK in 2007 under a European arrest warrant issued by a court in France.
 
In June 2009, a British court approved his extradition, but he was granted four extensions before Wednesday’s extradition order from the British Home Office.
 
France is also seeking his extradition over allegations of embezzlement from the Khalifa Group and French-registered subsidiaries.
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