Hedge Funds
Man Group Subsidiaries Found Liable in Kuwait Pension Bribery Case, With About $155m at Stake
A London judge held two units of the listed manager liable; the firm disputes the ruling, and the final sum is to be set at a hearing this month.
HedgeWeekly Hedge Fund Desk ·
Two subsidiaries of Man Group were found liable in a London civil case brought by Kuwait's Public Institution for Social Security, according to Hedgeweek and Insurance Journal. Judge Richard Jacobs issued the ruling on 5 November after a year-long trial, and the manager's shares fell by as much as 5.9% in London the next day.
The pension fund alleges its former director general, Fahad al Rajaan, diverted about $1bn over decades, partly through bribes from institutions seeking investment mandates. The judge concluded that two former Man employees knew an intermediary was paying al Rajaan. Antoine Massad, who led Man's Middle East business, was found personally liable. Man could owe roughly $155m, though the judge said the figure will probably move because several other defendants settled.
Hedgeweek reported that the judge criticised an internal compliance review for confirmation bias, but did not directly fault chief executive Robyn Grew, who was global head of compliance during that review. Man disagrees with the decision, calls it a legacy matter tied to a contract ended more than 30 years ago, and says it is weighing options including an appeal. A further hearing this month will fix the amount.
For allocators and risk teams, the case puts a spotlight on how intermediaries and placement relationships with sovereign and pension clients are policed, especially in the Gulf. The sum is small against a large listed manager, but the finding on compliance process, and any appeal, are likely to feature in operational due diligence.