“The new board of Commercial Bank of Kuwait (CBK) has chosen Dherar Al-Rabah as chairman, a bank official said on Thursday.”
The first question that came to everyone’s mind after hearing the news was: who is Dherar Al-Rabah?
Well, prior to his appointment as the Chairman of the new board of the CBK, Dherar Al-Rabah was the CEO and Managing Director of Stehwaz Holding, a subsidiary of The Investment Dar (TID). During his tenure at Stehwaz Holding, Dherar reported directly to his close friend, the renowned Adnan Al-Musallam. He was the perfect partner to Al-Musallam as he embodied the proverbial principle of the three wise monkeys to “see no evil, hear no evil, speak no evil.” During his tenure, Shizaru, the fourth monkey that is sometimes depicted with the three others and symbolizes the principle of “do no evil”, was never present. Stehwaz was a shell company to TID, a side pocket to its impaired and illiquid investments. In January 2010, a pool of 50 shareholders of Stehwaz finally retaliated and filed a legal complaint against the board of directors, auditors, and the parent company (TID).
One of the allegations was that back in 2007, TID sold its stake in Al-Madar Finance and Investments Company to Stehwaz after an auction failed to attract any other bidders. The deal was struck for KD 99.1 million, 450 fils a share, resulting in TID booking a profit of KD 48.7 million. Today, Al-Madar is trading at 57 fils. More stark was the fact that Stehwaz underwent an IPO, but was never listed. Currently is it trading on Souk Aljet at a price around 25 fils.
It is evident how Dherar failed the company and it’s shareholders, however, he was there whenever TID was dry on cash and wanted to offload a toxic asset. He was good at following directions and was an inside man in the TID scandal. He knew every detail about the corporation, and most importantly the Boubyan Bank stake and lawsuits.
The appointment of Dherar is clearly an alignment of interest, or so, at least for the chairman of Securities Group. In 2009, TID filed three lawsuits with the Kuwaiti judiciary against CBK to stop the bank from selling Boubyan shares and demanding that CBK returns the shares to Investment Dar. The complaint came after CBK said that TID and its related firms lost their right to buyback a 19.2% stake in Boubyan Bank originally valued at KD 94.1 million under a 2008 agreement. CBK had agreed to sell its 19.2% stake to the National Bank of Kuwait for about KD 121 million. On April 6th 2010, a Kuwaiti court ruled that it didn’t have the jurisdiction on a lawsuit filed by TID against CBK seeking to annul the sale of Boubyan Bank shares.
Upon the appointment of the new board to CBK, the old board was not cleared from wrongdoings at the request of one shareholder, Ali Al-Mousa (chairman of Securities Group). He asked for the leaving board’s pay to be examined. The shareholder insisted he was not making any accusations of wrongdoing, but exercising his right to demand information. This reminds me of one the most famous lines in The Godfather “Fredo, you’re my older brother, and I love you. But don’t ever take sides with anyone against the Family again. Ever.”
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