Figure in Iran Arms Deal Besieged by Creditors : Khashoggi’s Posh DC-8 Seized for Debt

A lavishly furnished DC-8 airplane belonging to arms broker Adnan Khashoggi has been seized by French authorities in the latest sign that the flamboyant Saudi is suffering growing financial problems stemming in part from his role as financier of the U.S. arms shipments to Iran.

In a series of court actions this week, Khashoggi has found himself under siege by creditors pursuing large chunks of his apparently floundering business empire.

Although many details are still unclear, some creditors said Thursday there is evidence that Khashoggi’s problems appear related in some degree to his inability to regain his principal and earn expected profits on the millions of dollars he provided in 1985 and 1986 to underwrite the arms deliveries to Iran.

Failed to Repay Loan

The most dramatic action occurred this week when lawyers for British industrialist Roland W. (Tiny) Rowland obtained a court order seizing Khashoggi’s DC-8 at Le Bourget Airport outside Paris. A judge issued the order after Rowland’s lawyers presented evidence that Khashoggi had failed to repay a $2.5-million loan--plus about $500,000 in interest--advanced to him by Rowland in August, 1985, lawyers for Rowland said Thursday.

That order was issued 10 days after Rowland’s London-based mining and trading conglomerate, Lonrho, obtained a separate court order seizing another of Khashoggi’s airplanes, a DC-9, because of failure to pay two other loans totaling $4 million, according to a Rowland associate.

Refusing to Pay Debt

One of Rowland’s lawyers, Colin Joseph, said Thursday that Khashoggi’s representatives in recent days have promised to repay the loans to Lonrho soon. But the representatives are refusing to repay Khashoggi’s debt to Rowland personally because the Saudi contends that Rowland owes him the money from another business deal, Joseph said. Joseph said that Rowland does not owe that debt.

Robert A. Shaheen, a Khashoggi spokesman in New York, refused to comment.

The DC-8--with three bedrooms and a huge electronic map of the cosmos--is among the more spectacular of Khashoggi’s possessions, helping to reinforce his reputation as the “world’s richest man.” In a cover story on Khashoggi in its current issue, Time magazine featured the aircraft, describing it as having “the streamlined and futuristic feel of a flying 21st-Century Las Vegas disco.”