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Switzerland's Bank Sarasin loses $200 million case against Al Korafi family

Chris Hamblin, Clearview Publishing, Editor, London, 1 September 2014

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Bank Sarasin-Alpen, the Middle East subsidiary of Swiss-based Bank Sarasin, has lost a civil case levelled against it by Kuwait's prominent Al Khorafi family over the mis-selling of financial products worth $200 million.

Bank Sarasin-Alpen, the Middle East subsidiary of Swiss-based Bank Sarasin, has lost a civil case levelled against it by Kuwait's prominent Al Khorafi family over the mis-selling of financial products worth $200 million.

 

The Dubai International Financial Centre's Court of First Instance found that Sarasin sold unsuitable investments to Al Korafi family members in 2007 and 2008 and ordered it to pay compensation to the family, although no figure was set.

 

According to court documents, the Khorafi family, which includes Rafed Al Khorafi, his wife and mother, purchased structured financial products from Bank Sarasin totalling $200 million, funded by loans from Al Ahli Bank Kuwait and Bank Sarasin. The family issued a writ against Sarasin in 2009, claiming that the risks of the investment were misrepresented. Bank Sarasin is considering an appeal, but must make its mind up imminently.

 

Deputy chief justice John Chadwick said he did not take the view that Al Khorafi had 'overreached' himself and that his schemes had fallen apart as a result of the financial crash in 2008, saying: “I am satisfied that the present is a clear case of mis-selling unsuitable investments to an unsophisticated investor, and to his equally unsophisticated wife and mother.”

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