Criminal Court of Bahrain reaches a verdict on the criminal case against Majid Al-Refai

Criminal Court of Bahrain reaches a verdict on the criminal case against Majid Al-Refai

Former CEO convicted of criminal charges and sentenced to 4 years in prison 

Manama, June 26, 2012: The Criminal Court of Bahrain issued a ruling today against Majid Al-Refai, the former Chief Executive Officer of Bank Alkhair (formerly Unicorn Investment Bank), sentencing him to 4 years in prison. Al-Refai was found guilty of embezzlement; misappropriating and squandering Bank funds; destroying critical Bank documents; and deliberately obstructing the Bank’s shareholders and authorized entities from accessing the Bank’s records. The Court also sentenced Al-Refai’s associate, Falah Al-falah, to 1 year in prison for his involvement in misappropriation and dissipation of Bank funds.

At the end of the first half of 2010, when doubt was first cast on Al-Refai’s trustworthiness as Chief Executive Officer of the Bank, the Bank’s Board of Directors met and approved the revocation of Al-Refai’s powers as CEO. Subsequent investigations by Price Waterhouse Coopers and Ernst & Young, as well as renowned law firm Latham & Watkins, revealed a series of fraudulent and illegal conduct by Al-Refai. Consequently, Majid Al-Refai was terminated from his position in August 2010.

In September 2010, Bank Alkhair submitted a criminal complaint against Al-Refai to the General Prosecutor of the Kingdom of Bahrain. Following the review of that claim, the General Prosecutor commissioned global advisory firm, Deloitte, to conduct an independent investigation into the matter. The Deloitte report concluded that there were 58 criminal offences committed by Majid Al-Refai and his associates during their tenure at the Bank. The criminal offences relate mainly to transactions by Al-Refai that were not approved by the Bank’s Board of Directors, including; personally appropriating and squandering Bank funds; shredding and destroying over 8000 Bank documents; and preventing the Bank’s partners, associates and other authorized entities from accessing Bank documents, thereby contravening the laws of the Kingdom of Bahrain and the rules and regulations of the Central Bank of Bahrain.

It is worth noting that this is the third ruling issued against the former Chief Executive Officer in Bank Alkhair’s favor. In March 2012, the Bahrain Chamber of Dispute Resolution dismissed a claim by Majid Al-Refai for a compensation of BD1 million for his termination from the position of Chief Executive Officer of the Bank. In May 2012, Bahrain’s Supreme Fifth Civil Court also dismissed a claim filed by Al-Refai and three of his associates, requesting the nullification of the General Assembly’s resolution, issued in October 2010, to remove Al-Refai from the Bank’s Board of Directors.

Al-Refai is also facing charges of forgery and money laundering in the criminal courts of Bahrain. The former CEO stands trial for forging the Bank’s Articles of Association as well as money laundering, fraud and unlawfully soliciting donations.

Following the court’s ruling today, Mr. Yousef Al-Shelash, Chairman of Bank Alkhair commented: “We are glad that this case has finally been concluded and we can continue to focus our efforts on growing our business. Our priority is, and always has been, to protect the interests of all our stakeholders and the long-term future of Bank Alkhair, and we will continue to work diligently to ensure that the Bank is in a strong position to thrive and to achieve its long-term strategic objectives.”