According to The Wall Street Journal, Meshal Jarah Al Sabah, a Kuwaiti sheikh, filed a suit against Switzerland’s UBS. The sheikh alleges that in 2009 a senior executive at UBS offered $20 million to get the bank an advisory role on one of the biggest-ever acquisitions in the Middle East, but later the bank backed out of the deal, according to the sheikh’s testimony in a Dubai court. Sheikh Meshal Al Sabah said in sworn testimony that UBS offered the commission in 2009 to derail a bid by the French media group Vivendi for the African telecommunications assets of Zain, which is the biggest mobile phone company in Kuwait, and to get UBS a lead role finding a different buyer.
The sheikh sued UBS last year in the Dubai International Financial Centre Courts, claiming he was not paid his fee.
UBS denies the allegations and said in a statement that it is “vigorously defending this claim.” The trial is scheduled to begin in June, 2013.
Last year UBS met with Sheikh Meshal, but denied that it discussed the Vivendi sale, offered him payment or asked him for help getting a role in the sale of Zain’s African assets, which ultimately were sold to Indian telecom Bharti Airtel for $10.7 billion in 2010. UBS was the lead adviser.
In his testimony, Sheikh Meshal said that Omar Al Salehi, the UBS vice chairman of investment banking in the Middle East, offered him the fee at a meeting in mid-2009 when enlisting his help on the Zain deal. Zain was about to sell its African assets to Vivendi, the testimony says, and was getting advice from France’s bank BNP Paribas.
Meanwhile, after the deal was done, UBS lined up Bharti Airtel to buy the assets. As Zain’s lead adviser, UBS made a fee of $22.5 million, according to its filings in the case. When Sheikh Meshal asked for his payment, UBS balked, according to his testimony.
Later UBS invited Sheikh Meshal to apply for a position at the bank that would have paid $600,000 a year, plus 15% commissions on fees he granted, his testimony says. He says that job never materialized. But he considers UBS was casting about for alternatives to a cash payment.