The move marks a further blow to the fortunes of Rafik Abdelmoumene Khalifa, chief executive of the Khalifa Group, which numbers among its subsidiaries the landmark local airline Khalifa Airways, the newly established French television channel Khalifa TVand Khalifa Bank.

The transfer of power out of the hands of Khalifa Bank is the latest in a series of difficulties that have beset the one-time darling of Algeria’s private sector. The Khalifa Group, which was to be one of the main sponsors of the ‘2003 – Year of Algeria in France’ promotion before pulling out in late November, has been the subject of much negative press in France since the start of the year. The head of France’s Green Party, Noel Mamere, has also called for an inquiry into the source of the group’s funding, following leaks from France’s intelligence services.

In November 2002, the BdA put a freeze on the transfer of money overseas by Khalifa Bank following an investigation which revealed irregularities in the bank’s currency and exchange transactions. The move has further jeopardised the financial problems of the Khalifa Group, presenting it with increased difficulties in settling outstanding overseas payments.

In December, the group acquired the full operations of Germany’s Philipp Holzmann, only to sell off all but the local operations to a group of Middle Eastern investors for an undisclosed sum two months later. Finally, in late February, three senior group executives were arrested at Algiers airport as they were about to board Khalifa’s private jet to fly to Paris. They were found to be carrying Eur 2 million ($2.19 million) in cash (see Transport).