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Saturday, 30 January 2010

Kuwait needs to end its bailout culture

Hostile global forces wreaked havoc on economies around the world in 2009. It is understandable, therefore, that financially despondent citizens should not want to hear the word that became synonymous with last year — bailout.

Except that is, in Kuwait. Indeed, many of its nationals are hoping to hear the term that so many of us have become utterly tired of. As the Kuwaiti government and parliament come to a binding agreement on whether to rescue its citizens from a tide of mounting debt, the rest of the GCC watches on with interest to see what lessons can be learned.

It was Kuwait's national assembly that recently caused the furore by voting in favour of a bill that could see the government assume responsibility of Dh85.8 billion worth of consumer debt.

DIFC debates when Dubai moves into post-crisis mode

The Dubai International Financial Centre has for a long time been the physical focus of financial business within the emirate, like the Square Mile of London or Wall Street in New York.

Despite, or maybe because of, the fall-out from the global credit crisis, DIFC these days has broader ambitions. It aims to be a centre of business knowledge within the Menasa region (Middle East, North Africa and South Asia). Given the geographical scale and diversity of that region, encompassing around two billion people and 25 countries, depending on where you draw the lines to Menasa, it is an ambitious challenge.

But DIFC is nothing if not ambitious, and last week advanced its cause as a regional intellectual powerhouse with its the latest conference in the Knowledge Series. These gatherings are a kind of low-key, one-day Davos, and aim to bring together financial practitioners from across the Menasa region to thrash out the big issues of the day.

Bahrain banker held over fraud (Repeat)

The chief executive of The International Banking Corp (TIBC) has been detained by Bahrain authorities on allegations of embezzling more than $2 billion, a news report said Wednesday.
The public prosecutor ordered the detention of the executive, who may not be named according to Bahraini law, after he was charged with breach of trust and theft following two days of interrogation, the Arabic-language daily Al-Bilad said.

In July, the Central Bank of Bahrain assumed control of Manama-based TIBC, which is owned by the Saudi-based Algosaibi Group. TIBC, which was engaged in Islamic banking and provided commercial loans, reportedly owes $2.07 billion.

The Algosaibi Group announced in mid-2009 that it had discovered substantial irregularities at its financial services arm as well as widespread fraud in documents submitted to banks by TIBC.

Key shift in Kuwait is to become regional financial center - CEO

It is a key prospective economic and political shift for Kuwait to turn into a regional financial and trade center, a Kuwaiti corporate board chairman said.

"Turning Kuwait into a regional financial and trade center is one of the most significant expected economic and political changes," Al Hamra Company CEO Khalid al-Othman told KUNA.

He made the remarks following the inauguration of an exhibition entitled "Our Beautiful Country) late Thursday under the sponsorship and in the presence of Voluntary Work Center Chairperson Sheikha Amthal Al-Ahmad Al-Sabah.

The exhibition is a transitional tour of the times of Kuwait documenting its development through historical photographs, he said.

The 10-day event mainly aims to rally up support for efforts to embody the beauty of Kuwait by using interactive technology, he said, hailing Kuwaiti youth for taking exquisite and charming photos of Kuwait, he added.END

$750-mn fund for Indo-Saudi trade

A $750-million (about Rs 3,467 crore) fund will be created to facilitate private sector investment between India and Saudi Arabia when Prime Minister Manmohan Singh visits the Arab nation in February or March, the Saudi Arabian Ambassador in New Delhi, Faisal Hassan-al Trad, said in New Delhi on Friday. Of this corpus, $500 million (about Rs 2,308 crore) will be contributed by Saudi Arabia and $250 million (about Rs 1,155 crore) by India.

He said several pacts would be inked between India and Saudi Arabia during the visit, including an extradition treaty (that will take account of human rights protections in his country); a provision to enable Indian prisoners in Saudi Arabia awaiting trial to be tried in India; and an MoU on IT and science and technology.

Trad said it was a matter of some satisfaction that trade between the two countries had gone up 300 per cent between 2000 and 2008. Indian imports had gone up sharply mainly because of India’s energy needs, he said.END

Agility Postpones Hearings as it Seeks Settlement

According to reports, Agility asked U.S. Magistrate Christopher Hagy to reschedule today’s hearing. It has been the fifth time Agility requests the hearing to be rescheduled and it was postponed until February 8. However, judge Hagy wasn’t too happy as he reflected, “There’s a point at which this stops.” “It is our hope that it goes forward,” Assistant U.S. Attorney Barbara Nelan replied.

The reason Agility asked for the rescheduling is because of “ongoing negotiations” for a settlement. However, don’t completely bet on a settlement as Agility’s spokesman Dal Leibach revealed today that, “No agreement has been reached and there is no guarantee the discussions will result in an agreement.”

As a background, Agility was accused on November 17 in an $8.5Bn fraud and conspiracy case by the US government. The indictment will prevent Agility from bidding for contracts during the legal proceedings but the suspension doesn’t preclude it from completing current contracts. This is considered a severe blow for the company as it derives 75% of its EBIDTA from US government contracts (Cheuvreux estimates). Litigation risk is high as Agility stands to loss a minimum of approximately $136 million. In reaction, the share price has plummeted by more than 50% to KD0.600 fils from its last October levels of KD1.300.

Previous Related Articles:

1. Agility Indicted with $8.5B Fraud by US Government

2. Agility Fraud Case Implications END