The UAE’s National Security Strategy
Former US Secretary of State James Mattis famously referred to the United Arab Emirates as “Little Sparta.” By all accounts the UAE has earned the nickname: it deployed troops as part of the Coalition in Afghanistan and its planes conducted airstrikes against Islamic State targets in Syria. Most significantly, the UAE (along with Saudi Arabia) led the 2015 Intervention in Yemen, with Emirati commandos making an amphibious landing on Yemen’s southern coast and taking the port city of Aden.
But limiting the UAE’s security strategy to its conventional military capabilities shifts the focus away from how the country uses other tools of statecraft to pursue its national interests. The UAE’s legacy in Yemen will likely be the local proxies, who are now major political and military actors, that it spent years training and equipping. Many of these proxies are affiliated with the Southern Transitional Council, a secessionist group that has long-standing grievances with the Saudi-backed Republic of Yemen Government. UAE-backed militias have cooperated with US forces in counter-terrorism operations targeting Al-Qaeda in the Arabian Peninsula, and have also seized strategically-valuable parts of Yemen (including the island of Socotra). While Saudi Arabia has spent years looking for an exit from Yemen that allows it to salvage some measure of dignity and ensures that Yemen doesn’t become an incubator of security threats on its border, the UAE managed a graceful exit (made possible through its proxy forces) and developed a sphere of influence where none had previously existed.
The UAE’s Yemeni proxies are technically outside of the umbrella of a “conventional military force,” but they obviously are not too far away. The components of the UAE’s national security policy that receive a dearth of coverage are those related to the country’s domestic economic and financial investments. Some of these are pretty standard: the UAE is generally thought of as an arms importer, but the Tawazun Economic Council is currently centralizing and rationalizing the country’s domestic arms industry. Looking to the post-rentier future, the UAE hopes to become an arms exporter to markets including those in Africa. However, a lot of the UAE’s investments in the security sphere are further abstracted from any conventional definition of national security, and are generally weirder. The best example of this is, of course, G42. While the Tawazun Economic Council works in areas of defense and national security that fit the conventional definitions of those terms, G42 invests in companies whose products operate in a broader, contemporary definition of “national security” that includes categories such as medicine, tech, diplomacy, and surveillance; It’s a broad mandate.
G42 and its Investments
At first glance, the focus of Group 42 Holding Ltd. appears to be pretty limited. The company’s official Twitter account states that it is an AI and cloud computing company. Its acquisitions in those fields include the geospatial data company Bayanat and the Khazna Data Center. G42 also has significant investments in the healthcare sector; it was one-half of a joint venture with Chinese pharmaceutical company Sinopharm to produce COVID-19 vaccines in the UAE.
However, most companies investing in healthcare or tech do not have their country’s current national security advisor (in this case Sheikh Tahnoun bin Zayed Al Nahyan) as their company chairman. Unsurprisingly, G42’s investment portfolio includes companies that appear to play a significant role in reinforcing the UAE’s foreign policy initiatives. G42 was the first Emirati company to establish a subsidiary in Israel after the signing of the Abraham Accords, and it also formed the joint venture Presight.ai with Israeli arms manufacturer Rafael. G42 was also previously involved with GAAC Solutions (which will likely be the focus of a future post), the company contracted in 2020 by Afghanistan’s government to manage Kabul’s airport, which recently reaffirmed that deal with the Taliban. For the record, G42 has stated publicly that it pulled all investment out of Afghanistan after the US withdrawal in August 2021.
Beyond that, there are the unambiguously eyebrow-raising investments. G42 was allegedly involved in the rollout of ToTok, a digital communication application for residents of the UAE that turned out to be a surveillance tool. The company’s CEO Peng Xiao was formerly the head of Darkmatter subsidiary Pegasus. The Electronic Frontier Foundation is currently suing Darkmatter for using former NSA employees to hack into the electronics of regional dissidents, including Saudi human rights activist Loujain al-Hathloul.
Information about G42 exists in the public sphere, but the details are a little sparse. Most significantly, it is unclear exactly who owns the company. The private equity firm Silver Lake invested USD 800 million in G42 earlier this year, which got them a “minority stake” in the company with no accompanying ownership percentage. In November 2020 the UAE’s sovereign wealth fund Mubadala invested in G42 but failed to disclose how much of the company they owned as a result. The ToTok episode also indicated that there was likely a material relationship between G42 and the UAE-based conglomerate Royal Group, but provided little to no actual evidence of that fact. The UAE is not a jurisdiction known for its financial transparency, but G42’s lack of documentation is a little surprising.
However, some clarity is now available. An SEC Schedule 13D filing made this June by US biotech company vTv Therapeutics enumerates the ownership structure of G42 and some of its subsidiaries. The filing (which appears to have not been previously covered in media), is the first document to clearly lay out the ownership structure of G42, and one of its subsidiaries.
Information from vTv Therapeutics’s SEC Filing
On June 10 the North Carolina-based biotech company vTv Therapeutics Inc. filed a Schedule 13D with the SEC related to the purchase of 13.4 percent of its company stock. A Schedule 13D must be filed within ten days of a person or group acquiring more than five percent of a company’s stock. The filing was recently in the news as the document that Elon Musk failed to submit when originally trying to acquire Twitter. According to the documents, the shares in vTv Therapeutics were acquired by two “reporting persons:” G42 Investments AI Holding RSC Ltd., and Tahnoun bin Zayed.
The vTv Therapeutics filing includes a lot of valuable information. First, there are the company identifiers it lists, that I will not be going into. Instead, I want to focus on several other disclosures made in the document which are illustrated in the graphic below.
Red nodes are individuals, green nodes are companies registered in the UAE, blue nodes are companies registered in the US, and purple nodes are agreements signed between parties.
The first is that the vTv Therapeutics filing is the most detailed explanation of G42’s ownership structure currently available:
G42 Investments is a wholly-owned subsidiary of G42
G42’s majority shareholder is RGH1 Investment SPV RSCC Ltd. (better known as Royal Group), a business conglomerate.
Royal Group’s ultimate beneficial owner is Tahnoun bin Zayed
The filing (and the graph) includes more information, but that is probably the most exciting news.
The filing also provides additional context for the purchase. One of vTv Therapeutics products is TTP399, an oral glucokinase activator that is made to be taken in addition to insulin by type 1 diabetics. In April 2021 the FDA granted TTP399 a breakthrough therapy designation to expedite the drug’s review process, and one of the purposes listed from the capital raised through vTv’s share sales is the funding of a Phase 3 clinical trial. 16.3 percent of the UAE’s population has type 2 diabetes, and 40.7 percent of those affected are unaware of their diagnosis. TTP399 would presumably be an incredibly valuable resource in a country where diabetes is a public health crisis. In addition to the stock purchase, the filing notes that vTv Therapeutics previously signed a Collaboration and License Agreement with Cogna Technology Solutions LLC, an Emirati company that is listed as an “affiliate” of G42 Investments.
Finally, the filing notes that if TTP399 passes the trial phase G42 Investments will be given the right to purchase an additional USD 30 million in stock from vTv Therapeutics. Assuming the drug is effective, this could translate to a significant payday for G42.
Closing Thoughts
If you made it this far I assume that you found at least some of this information valuable. You might be wondering, however, how exactly any of it is applicable. Off the top of my head, I can think of three reasons that the vTv Therapeutics filing is important:
Though I did not focus on it, this filing has the most recent (and accurate) address information for G42 and one of its subsidiaries ever disclosed. To my knowledge, Abu Dhabi has not yet suffered from a major leak of corporate data. Assuming that ever happens, I am curious to see what other businesses are registered at the addresses of both G42 and G42 Investments.
The filing also states that Tahnoun bin Zayed “exercises sole dispositive and voting control” of the purchased vTv Therapeutics stock. It is fairly common for companies to duplicate ownership arrangements across multiple subsidiaries, so while this is only one example of G42’s ownership structure, it could be a model showing how Tahnoun bin Zayed is connected to other G42 subsidiaries and their acquisitions.
The UAE is the definition of an opaque jurisdiction, and finding information about commercial entities based there is like pulling teeth. Checking regulatory databases in the US and EU for information on foreign companies is nothing new, but this illustrates how effective it still is as a method for finding information on companies in other, less transparent jurisdictions.
DamYankee
I appreciate your insight Mr. Greenwald but I disagree you on one matter. The following statement is inaccurate: "Finally, the filing notes that if TTP399 passes the trial phase G42 Investments will be given the right to purchase an additional USD 30 million in stock from vTv Therapeutics."
The correction is as follows from the License Agreement between Vtv Therapeutics & G42 Investments on page 11:
"the Company shall issue to the Purchaser as payment for the services provided by or on behalf of the G42 Counterparty under the Collaboration and License Agreement a number of newly-issued shares of Common Stock (such newly-issued shares, the “Milestone Shares”) equal to the quotient of (A) $30,000,000 divided by (B) the greater of (1) $1.20 and (2) the volume-weighted average price per share of Common Stock on the Nasdaq Capital Market as such daily volume-weighted average price per share is reported by Bloomberg L.P. (or, if such information is no longer reported by Bloomberg L.P., as reported by a comparable internationally recognized source reasonably determined by the Company) calculated for the twenty (20) consecutive trading days immediately following (but not including) the date the Company receives notice of the FDA Approval (rounded down to the nearest whole share); provided that, within thirty (30) days following the FDA Approval, in the event that the Purchaser is otherwise entitled to the Milestone Shares, the Purchaser may elect to receive, by written notice to the Company, in lieu of the Milestone Shares, $30,000,000 in cash"