MPs blast Dow deal as ‘theft of century’ – Govt to keep selling stakes in firms

KUWAIT: Interior Minister Sheikh Mohammad Al-Khaled Al-Sabah and Speaker Marzouq Al-Ghanem attend a parliament session at the National Assembly yesterday. — Photo by Yasser Al-Zayyat

KUWAIT: Interior Minister Sheikh Mohammad Al-Khaled Al-Sabah and Speaker Marzouq Al-Ghanem attend a parliament session at the National Assembly yesterday. — Photo by Yasser Al-Zayyat

KUWAIT: MPs yesterday began a debate over a highly controversial deal with US firm Dow Chemical, which resulted in Kuwait being ordered to pay a huge $2.2 billion penalty. The Assembly agreed to continue the debate today to allow more MPs to talk on the multibillion-dollar deal amid allegations of conspiracy, corruption and theft. Kuwait was ordered to pay the fine after it unilaterally scrapped the joint venture deal with Dow in late 2008 following a political dispute between the government and the then opposition lawmakers.

The current Assembly asked its public funds protection committee to investigate the deal and why the government rushed the payment of the fine, when it could have delayed it. Head of the committee MP Abdullah Al-Turaiji said the deal is one of the largest financial crimes in the history of Kuwait because it cost state coffers a huge sum. He said the state-owned Kuwait Petrochemicals Co (PIC) signed the deal with the knowledge of the government and hired an international advisor, while ignoring a large number of consultants in Kuwait. He said that the financial advisor appointed by the company owned a stake in Dow Chemical and made $62.7 million from the deal.

He charged that the then oil minister Mohammad Al-Olaim and former CEO of Kuwait Petroleum Corp Saad Al-Shuwaiyeb “cheated the Supreme Petroleum Council” with regards to the deal. He said that former oil minister Hani Hussein worked as a consultant for Dow Chemical and also for PIC. He sent 35 top oil executives into retirement to cover up the mistakes in the deal.

Turaiji said that large international banks had advised Kuwait against going ahead with the deal, but oil executives insisted to sign the joint venture. He also said that Kuwait’s legal representation in the arbitration was weak and not convincing, and hinted that the whole issue might have been manipulated to make illegal profits. Turaiji then called for referring the report to the public prosecution.

But liberal MP Faisal Al-Shaye insisted that the cancellation of the joint venture came after opposition MPs threatened to grill former prime minister Sheikh Nasser Al-Mohammad Al-Ahmad Al-Sabah, saying the decision was political in nature. He said the committee report is unfair and biased because it interviewed people with one opinion, so it is one-sided. Shaye added that people who rejected the deal and SPC members who resigned were not called for the probe.

The lawmaker said that everyone knows that the decision to scrap the deal was political and wondered how the report can implicate 24 people in the issue. He said that some of the allegations are unsubstantiated, but still called for referring the report to the public prosecution for a legal probe. MP Sultan Al-Shemmari described the issue as the “theft of the century” caused by political disputes. MP Faisal Al-Kandari described the persons charged in the reports as “thieves” who betrayed national interests for their selfish interests.

The Assembly also discussed another report of the committee about public funds wasted in a private company called Advantage, which lost almost all its capital. The Assembly approved a recommendation to refer the report to the public prosecution.

In other business, the Assembly criticized cCbinet ministers for failing to answer queries by MPs and decided to hold a meeting with the government to find a solution to this problem. State Minister for National Assembly Affairs Ali Al-Omair however told the Assembly that ministers have already answered 2,007 questions from around 2,350 questions received.
Finance Minister Anas Al-Saleh told the Assembly that the government will continue to sell its stakes in local companies, adding that the process had started in 1995 and is not new. He agreed to meet with the finance committee tomorrow to discuss the issue with them. MPs also voted to ask the public utilities committee to speed up the amendment of Kuwait Airways law with MP Askar Al-Enezi saying the delay is caused by disputes of influential people.

By B Izzak


This article was published on 01/12/2015