Hajraf's grilling ends inconclusively - MPs allege wide-ranging violations

KUWAIT: Finance Minister Nayef Al-Hajraf yesterday strongly defended Kuwait's policy in managing its foreign investments estimated at around $600 billion, but acknowledged some investment funds performed badly. Speaking during a grilling by MPs Riyadh Al-Adasani and Bader Al-Mulla, the minister also defended the government's budget policy, saying that subsidies to public services have been maintained in this year's budget, which means there will be no further increases in charges or fuel prices.

The grilling ended after several hours of intense debate without lawmakers presenting a no-confidence motion. They only submitted a recommendation calling on the National Assembly's financial and economic affairs committee to investigate all issues in the grilling and report back to the Assembly within three months. He said over 95 percent of Kuwait's investments are invested in stable countries and instruments, and that out of 420 funds in which Kuwait Investment Authority (KIA) is dealing with, there have only been a few bad performers. He said the Future Generations Fund grew by 152 percent, and the authority has risk management centers in Kuwait, the US and Ireland.

The minister however acknowledged a massive loss of close to €600 million in Kuwait's investment in French nuclear company Areva, saying what KIA had done was the best available option to stop further losses. He also said public funds may have lost more than KD 500 million in the investment in the so-called port fund.

Hajraf said more than 95 percent of the issues raised in the grilling were from long before he became a minister, which means that raising these issues involves a constitutional violation. He said the state's finances and investments have improved, saying this will be illustrated when the country's financial status is discussed in the Assembly, adding that such finances and those of defense will be kept confidential.

The minister declined to explain what is happening in the Philippines with regards to Kuwaiti investment in order to safeguard measures being taken by the investment authorities. Hajraf said it is not possible that "all our investments everywhere will be successful, because investments are subject to loss and profit". He said the value of inventories has been reduced from some KD 8.6 billion to around KD 4.5 billion, adding that transfers between chapters of the budget are mainly to finance the employment of Kuwaitis.

The two lawmakers had charged that the ministry of finance is responsible for losses of billions of dollars in Kuwaiti investments abroad and locally, some of them very suspicious. MP Adasani said hundreds of millions of dinars were lost by the social security institution by not taking timely action against its former managing director who fled the country, claiming the ministry has not taken proper legal action against him.

He highlighted a corruption case in port investments, alleging an organized gang was stealing public funds through some fake companies, charging that some overseas interference has taken place to protect those involved. Adasani also said some KD 290 million was lost by the Touristic Enterprises Co. MP Mulla claimed the government keeps investment information confidential because it does not want anyone to see its management failures.

By B Izzak