International Investment Group Kuwait - Court Case Loss = KD2.7 Million Loss

International Investment Group Kuwait ("IIG") (KSE #215) announced this morning that the Court of Appeals (or more properly for Kuwait Court of Cassation) had ruled against it  on 17 December.  The Court ordered IIG to pay KD3.2 million plus legal interest at 7% from 23 February 2009 (roughly US$11.8 million including about US$0.6 million in interest).  IIG states that as a result it will recognize KD2.7 million (US$9.9 million)  in losses for the final quarter of 2009.

At 30 September 2009, IIG had published losses of KD8.1 million (US$28.4 million).  Total assets were KD135 million (US$473 million) and shareholders' equity KD56.3 million (US$197.1 million).

KSE press release below.   There is also one at the Bahrain Stock Exchange. 

[9:23:5]  ِ.(المجموعه د) تحقق خساره 2.6 مليون د.ك نتيجة صدور حكم ضد الشركة
يعلن سوق الكويت للأوراق الماليه ان شركة المجموعه الدوليه للاستثمار ‏
ِ(المجموعه د) أفادت بأن محكمة التمييز أصدرت حكم بتاريخ 17-12-2009 ‏
في الطعن بالتمييز رقم 990/09 تجاري /4 المرفوع من الشركة ضد أحد الاشخاص
و الذى جرى منطوقه كالتالي :‏
حكمة المحكمه أولا : بقبول الطعن شكلا و في الموضوع بتمييز الحكم المطعون
فيه و ألزمت المطعون ضده المصروفات و مبلغ عشرين د.ك مقابل اتعاب محاماة.‏
ثانيا : و في موضوع الاستئناف رقم 1671 لسنة 2009 تجاري بإلغاء الحكم
المستأنف و القضاء مجددا بإلزام المستأنف ضدها بأن تؤدي للمستأنف عن نفسه
و بصفته مبلغ 3.247.780 د.ك و فوائدة القانونيه بواقع 7% سنويا من تاريخ
رفع الدعوى الحاصل في 23-02-2009 حتى تمام السداد و ألزمتها بالمصروفات
عن الدرجتين و مبلغ ألف دينار فعليه للمحاماة.‏
و تفيد الشركة بأن أثر هذا الحكم على البيانات الماليه للشركة حتى تاريخه
خساره بمبلغ 2.687.495 د.ك سوف يتم ادراجه في بيان الدخل للربع ‏
الأخير من عام 2009 .‏
و عليه سوف تعاد الشركة للتداول بعد عشر دقائق من نزول الاعلان .‏

This court case was one brought by Mr. Hussayn Ali AlKharafi and his son Ahmad against IIG.  This case is not related to the earlier case by the World Islamic Charitable Organization. Nor to the one involving Kuwait Finance House. 

Nor it seems the one involving the Islamic Development Bank.  As a side note, in the IDB case, IIG advised it was in negotiations with the IDB regarding the legal interest applied by the court  to secure a waiver of  "a part of the interest" "due to conflict with Shari'ah principles".  It is unclear to me what the results of the negotiations were.  And how one determines which part of the interest is halal and which is not.

Mr. AlKharafi's charge is that IIG didn't sell a portfolio of stocks in line with his instructions and that therefore IIG is liable.  IIG contended (and presumably still does) that the legal document given by Mr. AlKharafi was merely a proxy or authorization to sell and not an instruction.

Note 25 to the 2008 financials discusses court cases as of that date.

More on IIG to follow.