A Kuwaiti company suing the Carlyle Group over a US$25 million investment that went bad is now accusing the private equity firm of marketing the deal without a license as it seeks to have its case heard in Kuwaiti courts.
The latest claim by Kuwait’s National Industries Group (NIG) adds a new twist to its more than two-and-a-half year legal challenge to Carlyle, and could complicate the US company’s relationships with other wealthy Middle East investors.
NIG’s lawsuit focuses on a Carlyle investment fund that was one of the earliest casualties of the financial crisis when it collapsed in 2008. The fund has been the subject of multiple lawsuits against Washington-based Carlyle.
In a motion filed this month with a Delaware court hearing the case, NIG argues that the dispute should be heard in Kuwait because Carlyle lacked the legal basis to pitch the deal there in the first place.
Selling foreign securities or shares in investment funds in Kuwait requires a license from local authorities, according to a declaration by lawyer Ahmed Zakaria Abdel-Magied filed by NIG attorneys. He added that marketing such investments without a license makes the underlying deal invalid.
NIG said yesterday it is entitled to the return of its US$25 million investment under Kuwaiti law.
“Carlyle was more than happy to conduct its sales presentations in Kuwait and close its deals in Kuwait,” NIG general manager Ahmed Hassan said in a statement. “But now that the moment has come to deal with the ugly aftermath ... Carlyle would prefer to try its luck in Delaware.”
Carlyle has tried hard to woo clients in the oil-rich Gulf Arab states. It opened an office in the financial hub of Dubai in 2006 and its shareholders include Mubadala Development Co, an investment company owned by Abu Dhabi.
The Carlyle fund involved in the Kuwait case, known as Carlyle Capital Corp Ltd, went bust in March 2008. It used high levels of debt to invest in securities backed by bundles of home mortgages that had been given a seemingly safe “AAA” rating by credit rating agencies.
Carlyle did not immediately respond to a request for comment about the case yesterday. Its Dubai office said employees there were not authorized to speak to the media and referred requests for comment to its London office. There was no immediate response to messages left in London outside of business hours.
Carlyle has repeatedly said it will fight NIG’s suit.
“We believe these claims are without merit and intend to vigorously contest all such allegations and are currently unable to anticipate what impact they may have on us,” Carlyle said in its most recent quarterly report, filed on Aug. 14.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks