Kuwait Fund Claims Immunity in Bonus Fight With Ex-Managers
(Bloomberg) -- Kuwait’s sovereign wealth fund, in the middle of a lawsuit with former managers at its U.K. office, says diplomatic immunity means it can avoid handing over “sensitive” documents to the court.
The Kuwait Investment Authority is challenging an employment claim from a former executive, Simon Hard, saying he raised salaries and bonuses while his boss was away. The fund’s London branch is appealing a “remarkable and invasive” order that it provide internal emails and investment mandates.
“The making of these orders violates both the [fund’s], and the State of Kuwait’s, rights in international law, with potential consequences for Her Majesty’s Government in the conduct of the U.K.’s international relations,” the fund’s lawyer, Dan Sarooshi, said in a legal filing for Wednesday’s hearing.
The KIA, the oldest and one of the world’s largest sovereign wealth funds, started out as a Bank of England account dedicated to receiving oil money in 1953. It insists the London branch is part of the Kuwaiti mission and the government’s own ambassador has asserted that the office is entitled to immunity.
Such immunity “provides this absolute protection in relation to the archives of the mission,” Sarooshi said.
The fund alleges that Hard and two other former employees at its London office were part of a conspiracy in 2018 to award themselves unauthorized salary and bonus increases. Inquiries by Kuwait’s State Audit Bureau into the alleged compensation irregularities started in January 2019 and the KIA filed a claim early last year for more than 1 million pounds ($1.4 million) in damages.
All three employees have denied the allegations.
Hard, who says he was victimized and faced age discrimination, argued that the fund’s refusal to provide the documents means the legal fight is entirely unfair.
The fund “cannot elect to participate in English legal proceedings and then not play by the rules. It has a choice whether to participate in the proceedings,” his lawyer, James Laddie, said in a legal filing.
The KIA manages the OPEC member’s General Reserve Fund -- the government’s main source of budget financing -- as well as its Future Generations Fund, an estimated $600 billion vehicle designed as a buffer for a time after oil.
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