Dubai : Three Gulf investors, including Rafed Al Khorafi, chairman of the Kuwait-based AM Al Khorafi group, are suing two Eur-opean banks of the same family for what press reports said was "negligent investment advice".
The case was filed in the court of the Dubai International Financial Centre (DIFC), late last year, Gulf News can confirm.
The three investors are Rafed Al Khorafi, Amrah Hamad and Alia Al Rifai. The banks are Bank Sarasin-Alpen and Bank Sarasin & Co. Other details are not clear as the case is pending.
While repeated attempts to reach Al Khorafi were not immediately successful, an emailed statement from the DIFC Courts Registry said it is "unable to provide any documents in relation to the case at present", and that is "due to the fact that one of the parties has not yet filed an acknowledgment of service… and so an application for the court's permission needs to be made in order for the documents to be released."
Structured notes
In the UAE, domestic and international banks have been selling structured notes, both capital protected and without capital protection, in the past few years. With the onset of the global financial crisis, scores of investors lost heavily after such structured notes offered by banks went sour.
Among the well publicised case in the UAE was that of National Bank of Fujairah against which a group of investors alleged that the risks associated with the structured products were misrepresented.
NBF has, however, denied such charges.
In August last year, the UAE Central Bank issued a directive to all banks to seek permission to sell such products.
Sameena Ahmad, managing director of Alpen Capital Limited, the investment unit of Sarasin Bank, told Gulf News, "It is our policy not to comment on any kind of pending legal cases".
However, press reports said the three Gulf investors are seeking $225 million from the two banks alleging that one of their units provided "negligent investment advice".
According to Bloomberg, Al Khorafi and his family lost about $75 million after Bank Sarasin-Alpen and its parent recommended they invest in complex financial products instead of capital-protected instruments, as they requested.
The claim seeks triple that amount in damages because of the alleged negligence.
