Kuwait investment chief quits

THE POWERFUL London-based Kuwait Investment Office (KIO) has been thrown into turmoil by the sudden resignation of its Kuwaiti chief at a time when it faces growing allegations about political payments made during the Gulf War.

Ali Raschaid al-Bader, managing director of KIO parent the Kuwait Investment Authority, resigned last week leaving no successor, in a move yet to be formally announced.

The KIA manages $30bn to $40bn (pounds 20bn to pounds 27bn) of Kuwaiti assets, including huge KIO investments such as its key stakes in BP and Daimler-Benz.

Mr al-Bader's exit comes as the KIO faces damaging allegations in courts in London and Madrid over the $5bn collapse of its Spanish investment empire, Grupo Torras, three years ago.

Spain has been rocked by allegations, first made in London, of a plot to blackmail King Juan Carlos over the alleged receipt of $100m from Torras for Spanish support during the 1991 Gulf War.

The claims were made by Javier de la Rosa, the KIO's former Spanish adviser, who is defending a $500m London lawsuit from Torras that alleges fraud by the KIO's former top managers.

In the past, the KIO has also channelled money to the Conservative party via offshore property firm Blackford Holdings. The defendants say further disclosures are on the way.

"If all this goes on, there will be stronger revelations which will have a greater effect in Britain," said one source close to the case.

Mr al-Bader, appointed in 1992 to clean up Torras, announced his resignation on Tuesday at a meeting of 20 top KIA executives in Kuwait. The official reason was a desire to look after his family affairs, sources close to the KIO say.

Mr al-Bader has, however, been under mounting pressure because of the poor performance of Kuwaiti investments and privatisation as the country struggles to recover from the Iraqi invasion of 1990.

Litigation costs have also mounted, with an estimated pounds 28m paid to lawyers Baker & McKenzie in London alone.

There is also speculation that the KIO may have to sue King Juan Carlos's financial adviser, Manuel de Prado, recipient of the alleged $100m political payment via Swiss bank accounts.

The Independent on Sunday has learned that Mr al-Bader met Mr de Prado in Geneva in April. It is not known what was discussed.

Despite repeated calls, the KIO declined to comment on the case or Mr al-Bader's resignation.

Baker & McKenzie also referred all questions to the KIO about enjoining Mr de Prado to the case: "We can't comment on that. There's been a lot of publicity in Spain. But it's a relevant question to raise," the firm said.