A story in yesterday's editions stated incorrectly that former budget director Bert Lance would "net" $2.4 million form the sale of 60 percent of his 200,000 shares of stock in the National Bank of Georgia. The $2.4 million is a gross gain, not a net.
Former budget director Bert Lance agreed in principle yesterday to sell 60 per cent of his stock in National Bank of Georgia to a Saudi Arabian businessman for $20 a share, $3 a share more than Lance paid for the stock.
The Saudi, Ghaith R. Pharaon, an American-educated contractor in Jeddah, has several others investments in the United States.
Under the agreement, once the acquisition is completed, Pharaon will put out a tender off for 60 per cent of all the outstanding NBG shares, according to a release issued by Lance's Washington attorney, Robert A. Altman.
Three other major shareholders in NBG have already agreed in Principle to sell their stock for $20 a share in event a tender offer is made, the release said.
Because of the premium price of $20 offered, one NBG director said yesterday that he expected stockholders to jump at the offer.
Earlier, The Washington Post reported that plans were being discussed that plans were being discussed for Lance to head a company to invest funds of Arab interests.
Frank Van Court, Pharaon's attorney in Houston, said yesterday that the investment company was not considered in this transaction.
Altman, Lance's attorney, said: "I can't comment on the holding company or on any holding company."
Other sources close to negotiations said that plans are still being negotiated for Lance to head an investment group at a reported annual salary in excess of $300,000.
Lance owns 200,000 shares of NBG, which means that if the sale goes through Lance would net $2.4 million. This would greatly relieve Lance's heavy debt burden.
In January, when he disclosed his finances, he listed liabilities of $5.3 million.
Lance was forced to resign in September as the administration's director of the Office of Management and Budget after it was alleged that he engaged in questionable financial dealings at NBG and, earlier, at Calhoun First National Bank of Georgia where he also was chairman.
Lance is still under investigation by the Securities and Exchange Commission. A grand jury has been empaneled inAtlanta to subpoena documents and records in connection with Lance's financial affairs.
A three-member Justice Department team is reviewing evidence gathered by the SEC and other agencies to decide whether to go before the Atlanta grand jury to seek an indictment.
At $20 a share, the offering is more than twice what the stock was trading at before negotiations were announced. Trading in NBG stock over the counter was temporarily suspended after the news of the proposed sale sent the price of the stock soaring by nearly 50 per cent.
The bank has suffered a series a losing quarters. Some of the problems have been blamed on Lance. As president of NBG for two years, he produced much new business for the bank, but some of it has gone sour, since he left in January to go to Washington.
lance continues to enjoys a close relationships with President Carter. Just this week Lance paid a visit to the White House, one of several since he left office.
Pharaon, 37, a graduate of Stanford University and the Harvard Business School, is the son of a medical consultant to the royal family of Saudi Arabia.He was introduced to Lance by Agha Hasan Abedi, a Paksitani born banker who heads a fast-growing London bank with branches world wide, the Bank of Credit and Commerce International, 30 per cent owned by Bank of America and which handles the financial affairs of wealthy Middle Easterners.
In 1975, Pharaon bought 32 per cent of the common stock of Detroit's Bank of the Commenwealth. At the time, the Saudi ran into opposition from the city's Jewish community.
Last September, Pharaon's holding company, First Arabian Corp., sold his interest in the bank.
Pharaon's other investments include a concrete modular housing plant in Mobile, Ala., called International Systems, Inc., and 38 per cent of the Sam P. Wallace Co. in Dallas, a contracting firm.
He is also one of four investors who in September bought control of deposits of $60 million. The other members of the so-called control group include Sheikh Khaled Bin Mahfouz of Riad, Saudi Arabia, and former Treasury Secretary John B. Conally.
Pharaon's attorney said that none of the other Main Bank investors was involved in the purchase of NBG stock.