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KIO switches lawsuit to London

Justin Webster
Wednesday 10 February 1993 00:02 GMT
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BARCELONA - The Kuwait Investment Office is planning to move the legal action against its former managers to the UK after having its case rejected in Spain, writes Justin Webster.

A spokesman for Grupo Torras, the KIO's collapsed Spanish holding company, confirmed that a writ was being prepared in London but declined to comment on who would be named in it.

Last month the KIO was surprised when a 170-page writ prepared by a Spanish law firm - which accused Fahad al-Sabah, former chairman of the KIO, Fouad Jaffar, its former general manager, and five Spanish managers of conducting a fraud of more than 100,000m pesetas ( pounds 610m) - was thrown out by a Spanish court.

The judge in charge of financial cases, Miguel Moreiras, ruled that the investigation into the collapse of Grupo Torras should continue as a civil case - already in motion after Torras filed for protection from its creditors.

'In order for (the former managers) to receive a criminal sentence it would be necessary that this type of fraudulent or unfair management were included in our penal code,' Mr Moreiras said. He added that although this had been proposed the reforms had not yet passed into law.

The writ alleged fraud, misappropriation of funds, machination to alter prices, tax evasion and falsifying documents. The KIO has appealed against the decision.

Carlos Solchaga, the Spanish economics minister, resisted pressure from the main opposition parties to open a parliamentary commission into Grupo Torras.

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