A sterling quest for old silver

PUBLISHED : Saturday, 29 November, 1997, 12:00am
UPDATED : Saturday, 29 November, 1997, 12:00am

Technically, John Beasant is in Hong Kong as part of a business trip, albeit an unusual one. Mr Beasant, a stocky figure dressed in navy blue, is visiting on behalf of the former Prince of Yemen, Ahmed Farid, who was exiled to neighbouring Oman in 1969 after the collapse of British rule two years earlier.

Prince Ahmed, as Mr Beasant tells it, is today a wealthy businessman, able to return to his native country if he so chooses. Mr Beasant, the prince's press secretary, is not here to deal with any of the hotel or property interests in Oman, Arabia or London the prince owns or invests in.

Instead, he is in Hong Kong for two weeks to see if any one of four tycoons might want to invest in a pet project of the prince's: an expedition to retrieve silver bullion abandoned in a submerged shipwreck since World War II.

'All four I'm meeting with are representative of Hong Kong's legendary entrepreneurial spirit, the spirit of dare and do,' he says with a straight face.

Given recent problems in the Hong Kong stock market, his request may seem ill-timed. But Mr Beasant insists he is merely here to pique their interest; it is not necessary that they invest: 'If someone wants to invest, they can. If not, that's fine. It is a risky venture.' The story behind the silver bullion involves an American warship, a German submarine, US$80 million (HK$618 million) in Saudi coins, and - a mystery until two years ago - US$300 million worth of silver bullion.

In 1995 Mr Beasant wrote a book, Stalin's Silver, which recounts the story of how an American merchant ship, the USS John Barry, sank after it was hit by torpedoes fired from a German submarine on August 28, 1944. The 44 crew members and 27 American marines had time after the first hit to scramble for lifeboats. The second torpedo sank the boat for good.

Today the John Barry lies 228 kilometres off the coast of Oman, more than 2,584 metres below the Arabian Sea, the silver covered with more than 50 years of silt and sand.

After five months of research in Russia and the US, Mr Beasant says he discovered evidence suggesting that the American Government - under the guise of shipping newly-minted Saudi coins to Saudi Arabia - was also planning to covertly ship silver bars then worth US$26 million to Moscow. He believes it was part of a bid to persuade Stalin to keep the Russians in the war.

Mr Beasant says his research in archives in Moscow also revealed that under a lend-lease arrangement between the two countries, the silver bars comprised the largest single item on a Russian list of special requests. But while the list detailed how the other items were to be allocated, there was no explanation of what the US$26 million was for.

Had it not been sunk, according to Beasant, the bars were to be off-loaded at Middle Eastern port. 'They would have been taken overland by rail and truck into the heart of the Soviet empire,' he says. Mr Beasant also says he discovered that none of the shipping documents held by the American side mentioned the silver bullion on board; they only mentioned the Saudi coins - which were never meant to be a secret, anyway.

'What the silver was for, we don't know. But it would have been obvious to Roosevelt that the USSR would be totally bankrupt at the end of the war. I think it was a sweetener.' Mr Beasant says Prince Ahmed has already injected US$10 million into the project, both to purchase the rights from the US to retrieve the cargo in 1989, then to engage the French International Maritime Institute and Jean Roux, who led the team to recover artefacts from the Titanic, to develop technology and equipment for the deep-sea retrieval.

Photographs first need to be taken of the wreck to send back to the recovery vessel. A 'grab' can then begin, with a daily operating cost of about US$30,000.

In 1994, just under half of the three million Saudi coins were retrieved. Many of the coins were too scattered to recover.

The rights to the rest of the cargo expire in 1999. Whatever is pulled out of the sea, 10 per cent will go back to the US, equivalent to the amount the silver was worth in 1944. The remainder will go to investors. Mr Beasant says between US$2 and US$10 million will be needed.

'Of course there is a risk because we simply do not know how much is retrievable. Two thousand tonnes of silver bars are lying in 53 years of sand and it may be difficult to get it out. It is a slow and laborious process.' That takes us back to Mr Beasant, who himself has something of a history. The 53-year-old did a six-month stint at the South China Morning Post 10 years ago, but left disgruntled. In the two decades before, he had worked as press secretary or political adviser to prime ministers and presidents of Fiji, Vanuatu and the Maldives.

He has also worked as a bureau chief in Muscat, correspondent and contributor for the Gulf News, Reuters and the BBC - hardly a traditional career path, particularly for a native of a Wiltshire farm in England.

The prince himself has visited Hong Kong several times, according to Mr Beasant, but in a private capacity only.

But the question remains: why would anyone in Hong Kong want to invest in this project? 'I'm not here to take away money or even to take away a letter of intent,' insists Mr Beasant. 'It's to tell them about it and it would be up to them as to how much they want to invest. The bulk of the capital will come from the Middle East. The cost depends on how much we bring up. It has to be done in two years because the lease from the American Government to recover the silver expires in the autumn of 1999.

'Prince Ahmed is aware this is an international operation. It is an American ship, it's a German submarine, it is in Omani territorial waters, it involves a French maritime organisation, he is a Yemeni. This is something of colour and interest to him. It is also a chance for people here to be associated with a great adventure.'