Two private Swiss banks have successfully avoided standing trial in London over bribery claims linked to the alleged plunder of Kuwait’s state pension fund by its former head.
Fahad Al Rajaan, who is living as a fugitive in London, is accused of stealing nearly $850 million from Kuwait's Public Institution for Social Security (PIFSS) by securing secret commissions from banks in return for investing funds with them.
PIFSS has launched legal action against 37 defendants, including Mr Al Rajaan and his wife, with the majority of the claims to be heard in London.
But the fund appealed against a British judge’s ruling in 2020 that the case against a group of defendants including private banks Banque Pictet and Banque Mirabaud would be heard in a court in Switzerland, where most of the deals took place and the documents are held. The two banks said that Swiss banking secrecy rules meant they were unable to properly defend themselves in London.
Three judges sitting in London ruled against PIFSS on Wednesday and ordered the fund to pay the costs of the appeal.
The fund alleges that Mr Al Rajaan controlled tens of billions of dollars that were sent to investment houses on behalf of the Kuwaiti pension fund, but pocketed a slice of the commission using middlemen and siphoned it through offshore accounts.
Banks acted dishonestly by paying the “secret commissions” and by routing the money to disguise where it was going, according to documents filed by the fund.
Mr Al Rajaan, who is in his 70s and the fund’s former director general, fled to Britain in 2014 and faces prison if he returns to Kuwait. In 2016, a court in Kuwait found him guilty in his absence of embezzling the fund and he was sentenced to 10 years in prison.
PIFSS had claimed that Mr Al Rajaan, who is expected to give extensive witness evidence, would be arrested if he went to Geneva to give evidence. The businessman and his wife face charges in Switzerland of embezzlement, misappropriation of funds and money laundering.
Mr Al Rajaan was arrested in London in April 2017 on a request from Kuwait but the extradition effort foundered after he claimed asylum.
Since the extradition attempt, Mr Al Rajaan and his wife, Muna Al Wazzan, were convicted at a second trial in Kuwait, sentenced to life in prison and fined a combined $311m, according to legal papers filed by one of the banks.
The couple have been living in a five-bedroom serviced apartment in Knightsbridge, close to the upmarket Harrods department store, in an area of some of the most expensive properties in the UK. It was bought for £6.7m ($9.04m) in 2006.
Mr Al Rajaan is said to have assets in countries such as Switzerland, Bahrain, Lebanon, the US, Singapore and Lichtenstein.
He accepts that he received the money but denies that he has done anything wrong and claims that the allegations against him are “politically motivated and groundless".