Global takes NBQ to court for $250m

Kuwait-based Global Investment House, also listed on Dubai Financial Market, has moved court against National Bank of Umm Al Quwain (NBQ) seeking recovery of a deposit the former placed with NBQ in the middle of 2008.

Global stated in a document that NBQ has failed to refund a deposit worth $250 million (Dh917m), which it says it placed with the bank as an advance on a transaction between the two.

"The advice by the group's [Global's] legal advisors confirms the validity of the parent company's rights to seek a refund of the deposit. Therefore, subsequent to the period end, the parent company has filed a lawsuit against the bank for recovery of the deposit," Global said in a note to its Q109 financial statement.

Though Global has not mentioned NBQ by name, Emirates Business has reliably learnt that this refers to a stand-off between the two over conversion of bonds into shares that would have seen Global owning 20 per cent of NBQ after the bank's paid-in capital was expanded by 25 per cent.

A senior Global executive refused to confirm where the case has been filed – Kuwait or the UAE. NBQ said in its annual report that it received $250m from Global as an advance for the $645m shareholding deal and has demanded that Global pay the rest. Global has said it wants the advance returned to it because it was simply a "deposit" parked with the UAE bank.

On August 25, 2008, NBQ and Global announced an agreement on a convertible debt instrument for a total consideration of Dh2.36 billion.

The deal with Global is said to have agreed on a premium of Dh6.15 per share over and above the face value of Dh1.

   

Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.