UBS has been challenged in US$21.4 million lawsuit by Sheikh Meshal Jarah al-Sabah, a member of Kuwait’s ruling family, for failing to pay the latter the sum assured to enable him to become a lead arranger for a US$9 billion asset sale by a Kuwait-based telecoms operator Zain.
The complainant has stated that UBS entered into a verbal recruitment contract with him in July 2009, for preventing the French media conglomerate Vivendi to acquire Zain’s operations in about 15 African countries. The defendant has however denied any such allegation, as reported by Reuters.
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Meshal Jarah al-Sabah, in the documents submitted to the court, has stated that he met two officials from the bank at Atlantis hotel, where they discussed on advising shareholders and management of Zain to open a tender to other bidders for the operator’s African units.
He further stated that as per the conditions discussed there, Meshal Jarah al-Sabah were to assist the bank to become the lead bank for the sale, for a fee of 0.1-0.2% of the total deal value, payable upon the actualization of the deal.
The bank has not denied meeting the Sheikh, however, it denies the claim made by Sheikh stating that it was involved in the assets sales deal with Zain even before meeting the Sheikh. The bank claims that it had been involved in various other deals of Zain in the past even.
UBS also stated that it did not ask Sheikh Meshal to provide any services, and therefore is free of any obligation to pay any fee to the applicant.
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By GlobalDataUBS is represented in court by Charles Falconer, the former lord chancellor of Britain. The trial will run for five days and the verdict is expected in late summer.
Zain’s assets in Africa were acquired by India-based Bharti Airtel in 2010 for a total consideration of US$9 billion and UBS served as advisor for Zain on the deal.
