AlQabas has a report that Jamal AlMutawa, the former GM of CBK, was in the bank to assist with negotiations with TID (being run as per the article by TID's Chief Restructuring Officer) to solve the dispute over the BB shares. Jamal was "in charge" when CBK and TID agreed the repurchase transaction in 4Q08 which led to CBK asserting final ownership of the shares when TID failed to repurchase them in 2009. So presumably he's there to share what he knows about the genesis of the original deal and what promises and understandings both parties had at the time.
Reportedly the deal will preserve the rights of CBK to its money - this in effect sounds like the transaction is being treated as a secured loan rather than a sale/repurchase transaction. Presumably, CBK not only wants it principal plus interest back - but as well to be excused from the restructuring. The CRO, Mike Grant, is quoted as saying that any excess after CBK is paid its dues will accrue to TID.
The rest of the article deals with the resignation of Mr. AlRabah as Chairman of CBK and speculation that a ordinary general meeting of shareholders may be called if the call to a reserve director is unsuccessful.
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3 comments:
There is widespread disbelief at the bank at the behaviour of their ex CEO popping up on the "other side". Apparently he was in to negotiate a discount on behalf of TID with regard to their repo transaction and even asked for a discount on the non performing loan of one of the TID board members that he authorized in the first place!
Many thanks.
Perhaps, you meant "disquiet"? Notice how polite I am to use that word instead of another.
I say this because wouldn't disbelief imply they thought an event like this was very low probability?
Or is the reference to the non Kuwaiti staff's reaction? Though haven't a lot of them been in Kuwait for years?
As to discounts, what is more natural than having a non performing loan and asking for a discount? It is I believe a national tradition. After all, if one is a good customer, why wouldn't one expect preferred customer treatment?
I'm sure once the borrower gets a discount, he'll be more than delighted to take another loan. Repeat business. It's the key to a successful franchise.
If my recollection of bad debt experience of Kuwaiti banks is any guide, it seems a proven business model in Kuwait - except at one bank. But Abu Shukri has always been the odd man out up North.
Disappointed yes- but surprised no.
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