Swiss Banks Accused in Kuwaiti Pension Scandal

Two Quarrelsome Sheiks and Their Swiss Bank Accounts

Four Swiss wealth managers are in the crosshairs in a messy U.K. lawsuit involving the former head of Kuwait’s social security fund. At least one is disputing whether hundreds of millions in payments constituted kickbacks. 

Fahad Al Rajaan faces a tough choice: either lifelong imprisonment in his native Kuwait and a fine of more than $310 million – or seek asylum in Britain out of reach for Kuwait’s justice system, while reportedly maintaining a luxurious lifestyle in London’s fashionable Knightsbridge.

Unsurprisingly, Al Rajaan fled to London six years ago and asked for asylum in 2017. In 2016, he and his wife were convicted in absentia in Kuwait of embezzling $390 million from the state’s pension fund. Some of the money landed with four Swiss banks: Pictet, Mirabaud, EFG International, and Union Bancaire Privée, or UBP, according to «The National», a leading media outlet in the Middle East.

Lavish Lifestyle

The outlet on Wednesday put the contested funds at as much as $850 million, without elaborating. The 71-year-old apparently lived lavishly, according to U.K. court documents drawn from the Swiss banks’ filings. A judge put Al Rajaan’s spending at as much as $210 million over the last three decades.

Kuwait accuses him of taking commissions on the pension fund’s dealings for himself and stowing the money in offshore accounts. The four Swiss wealth managers, as well as six other Swiss financiers and middlemen whom the fund claims helped Al Rajaan with the alleged heist, are accused in a civil lawsuit in London.

London Vs Geneva

By contrast, Al Rajaan admits receiving funds, but denies wrongdoing, calling the accusations politically motivated and arguing that Kuwait government officials were aware he was drawing money. The case of a legal mess: Pictet and Mirabaud both deny wrongdoing and want the case heard by a Swiss judge. Kuwait doesn’t want this, arguing the case should be heard in London.

Should the trial be moved to Geneva, Al Rajaan is unlikely to show up: he would be arrested upon arrival in Switzerland on charges of embezzlement, misappropriation of funds, and money laundering. Mirabaud told the media outlet it would «vigorously» defend itself, and backed Al Rajaan’s assertion that the Kuwaiti fund had been aware of his kickbacks. He reportedly also stowed assets in Liechtenstein, the U.S., Singapore, Bahrain, and Lebanon as well as Switzerland.