International banking tycoon Edmond J. Safra was killed yesterday in a fire started by two knife-wielding intruders who broke into his luxury duplex apartment in Monaco and then set it ablaze.
The motive for the attack was not immediately known. Although police said they had not determined whether to launch an investigation for arson or murder, the death of Safra, one of the world's wealthiest men, sparked immediate speculation about who would want to kill him and why.
The killing shocked the normally placid Mediterranean principality of Monaco, where Safra was among the tiny tax haven's numerous wealthy and prominent official residents. Monaco called in French police to assist in the investigation, and police blocked roads in the principality in a search for the assailants.
The Lebanese-born Safra, 67, founded the Republic National Bank of New York in 1966 as part of a worldwide banking and financial empire that now has clients across the United States as well as in Latin America and Russia. Republic National officials said yesterday they knew of no reason why anybody would want to kill Safra.
Safra, who was suffering from Parkinson's disease, recently completed negotiations to sell his 29 percent holding in Republic National to the London-based banking firm HSBC Holdings PLC for $9.9 billion.
A well-known philanthropist who helped build synagogues and schools around the world and supported religious education in Israel, Safra was not free from controversy. In a highly publicized dispute in the late 1980s, American Express Co. was forced to apologize to Safra and donate $8 million to his preferred charities after some of its employees engaged in a smear campaign against him.
Republic National Bank was heavily overexposed in Russia and suffered nearly $200 million in losses in the Russian debt crisis last year. For years, Republic has been known in New York and Moscow as a bank where Russian government and business figures put their money. In October, Republic cut off about 100 correspondent banks in Russia in what was seen by some as a move to gain greater control over its accounts.
Police were alerted to the attack at Safra's apartment at about 5 a.m. Monaco time yesterday (11 p.m. EST Thursday), when a male nurse called to say that two men armed with knives had entered the building's sixth-floor penthouse, Daniel Serdet, Monaco's chief prosecutor, told a news conference, according to the Associated Press. The nurse received a minor knife wound to his stomach.
Unable to reach Safra, the intruders set the fire outside the penthouse before fleeing. Safra, along with his female nurse, Viviane Torrent, succumbed to smoke inhalation in a bathroom, where they had taken refuge, Serdet said. Safra's Brazilian-born wife, Lily, and her granddaughter, who had barricaded themselves in another room, were not injured.
It took Monaco firefighters nearly three hours to extinguished the blaze, which gutted the gabled top floor of the Belle Epoque building, which housed Republic National's offices in downtown Monte Carlo, not far from the storied casino.
It was not clear how the suspects attempted to enter the apartment; a Safra acquaintance who had visited the apartment recently described it yesterday as "Fort Knox." Serdet said police were questioning the billionaire's bodyguard, who was supposed to be in the apartment, about his absence at the time of the attack.
"We know nothing at this hour of how the attackers got in and out" of the apartment, Serdet told reporters.
For four decades Safra was a legendary figure in the mysterious world of private banking. But his recent losses and the onset of Parkinson's disease had hastened his decision to withdraw from the banking operations he and his brothers established on four continents--beginning in Brazil, when Safra was only 24.
On Tuesday, shareholders of Republic New York Corp.--parent of Republic National Bank of New York, the city's third-largest bank--voted to sell the bank to HSBC Holdings, Britain's largest bank, for $9.9 billion. Safra's personal share of that amount was $2.9 billion. Republic National had been accused of securities fraud in a case involving irregularities in the sale of bonds to Japanese investors, and Safra last month agreed to a $450 million reduction of the sales price to meet HSBC's concerns over the fraud allegations.
Bankers noted with grim irony that the transaction was approved only days before Safra was killed. "It's a tragic and bizarre turn of events," said John Kanas, chairman of North Fork Bank of Melville, N.Y. "Here he concludes his business and loses his life in the same week."
HSBC and Republic officials said Republic's sale would go forward and be completed by the end of the year as planned. "HSBC will uphold the banking tradition and integrity which were the hallmarks of Edmond's life," said Sir John Bond, chairman of HSBC, in a statement released by his office that made no further mention of the deal.
Safra was known as brilliant, enigmatic and, most of all, cautious and conservative. In 1994, when many of his fellow bankers were drowning in bad commercial real estate and Third World loans, he told Business Week in a rare interview what their problem was. "They wanted to make money too quickly," he said. "I'm in no hurry to make money. I want to build a bank that will last 1,000 years."
A shy, somber man, Safra left school and began working for his father, Jacob, in the banking business when he was a teenager. His unique, conservative approach to banking was rooted in the Sephardic Jewish community where his ancestors began their banking business. Safra moved the family business out of Beirut to Italy and Brazil after antisemitic riots swept Beirut in the late 1940s. He maintained his Brazilian citizenship even after he moved to Switzerland and then the United States.
Known to do business on a handshake, Safra started Republic National Bank with $11 million in capital in a Fifth Avenue town house and built it into the country's 20th-largest bank, with assets of about $50 billion.
Along the way, he began the practice of giving customers appliances, such as color television sets, for buying long-term certificates of deposit and presenting employees with turkeys--both kosher and non-kosher--at Thanksgiving.
Both religious and superstitious, Safra kept a kosher chef at his headquarters and was a philanthropist who gave thousands of scholarships to Sephardic students, supported religious institutions in Israel and a high school in Paris, and established chairs of Sephardic studies at Harvard University and international banking at the Wharton School in Philadelphia. Fond of the number 5, he made sure that the bank's phone number had 5's in it and established his bank on Fifth Avenue.
In 1983, Safra sold another bank he had founded, the Trade Development Bank of Geneva, to American Express, for $550 million. It was a move that Safra considered his biggest business mistake and began a well-known saga of feuds, betrayals and lawsuits.
Safra left the American Express board just two years later and signed an agreement not to compete with American Express for three years. When the time limit expired, American Express officials began inquiring into Safra's activities. Safra sued the company for allegedly spreading rumors to European newspapers that he was involved in drug trafficking and money laundering.
American Express later settled by publicly apologizing for a "shameful" effort to link him to the activities and donated $8 million to charities of Safra's choice. Henry L. Freeman, then an executive vice president of American Express, resigned after accepting responsibility for the efforts.
Trueheart reported from Paris; Walsh from New York. Correspondent Anne Swardson in Paris and staff researcher Richard Drezen in Washington contributed to this report.