Kuwait’s Khorafi family yesterday said it was planning to file a new multimillion-dollar claim against its former investment advisers, the latest development in the long-running row over a series of investments that went bad during the financial crisis in 2008.
Last Wednesday, Sir John Chadwick, the deputy chief justice of the DIFC Courts, ordered Bank Sarasin-Alpen (ME), a DIFC-registered bank, and Bank Sarasin, a related finance house from Basel, Switzerland, to pay the family US$59.6 million in compensation.
Bank Sarasin-Alpen (ME) was ordered to pay $35m to three members of the Khorafi family, while Bank Sarasin, which has subsequently merged with the Swiss bank J Safra, was ordered to pay $24.6m.
The Khorafi family is also seeking interest payment of about $5m.
Last week’s judgement follows the $10.4m in compensation that the courts awarded the family last October for losses sustained on the sale of their investments with Bank Sarasin.
The Khorafis now plan to launch further proceedings against the two institutions to recover losses arising from RAFCo, a property project in Kuwait that was cancelled because of the actions of the banks, according to Ghandy Abu Hawash, a senior partner at the Hamdan Al Shamsi law firm, which has represented the Khorafis.
He said the RAFCo claim was for about $40m.
The DIFC Courts ruled last year that the two institutions had mis-sold “unsuitable investments” to Rafed Al Khorafi, the head of the family business, his wife and his mother, in what was described at the time as “a clear case of mis-selling unsuitable investments to an unsophisticated investor”.
The three of them were introduced to Bank Sarasin in Dubai in 2007 by an accountant who was working for them and for Al Ahli Bank of Kuwait (ABK).
Mr Al Khorafi, his wife and his mother invested $200m – including loans from ABK and Bank Sarasin – in various “structured financial products” in the form of investment notes drawn up by Bank Sarasin in Dubai and Switzerland.
Follow The National's Business section on Twitter