Avast, ye! Somali pirates create an exchange for stolen loot

'Bourse' has 72 backer 'companies' that invest cash, weapons and receive a share of the booty

Dec 6, 2009 @ 12:01 am

By Darla Mercado

Market forces work everywhere — even, it would seem, on the high seas. According to published reports, Somali pirates have created a stock exchange to manage their ill-gotten gains. These scourges of the Gulf of Aden have been attracting dozens of investors over the course of the last four months, according to a Reuters report. The burgeoning exchange, located in the coastal town of Haradheere, Somalia, started with 15 “companies” and is now up to 72 entities, the news service found. A wealthy former Somali pirate named Mohammed told Reuters that shares in the exchange are open to all who would like to participate. Investors receive shares in a pirate company by taking part in a raid on a ship. Backers who don't want to go that far can get shares by providing cash or weapons to the pirates. Investors are paid dividends — a cut of the ransom money. Business has been booming. Last week, nine Somali pirates seized a Greek-flagged oil tanker some 700 miles off the coast of Somalia, near the Seychelles Islands, according to published reports. The vessel, the Maran Centaurus, was carrying 275,000 metric tons of crude oil, according to a report from the Associated Press.

There's easy money in capturing tankers, which don't have armed security due to their flammable cargo. The pirates netted a $3 million ransom payment last year when they hijacked the Saudi Arabian tanker Sirius Star, according to the AP.

The activity has helped bolster the local economy in Haradheere, which has morphed from a fishing village to a town where pirates cruise the streets in luxury cars, according to Reuters.

“Piracy-related business has become the main profitable economic activity in our area, and as locals, we depend on their output,” Mohamed Adam, Haradheere's deputy security officer, told Reuters.

“The district gets a percentage of every ransom from ships that have been released, and that goes on public infrastructure, including our hospital and public schools,” he added.

E-mail Darla Mercado at dmercado@investmentnews.com.

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