Kuwait approves rescue plan amid political dispute


The move came as a political standoff which has stalled economic reform in the Gulf Arab state appeared to worsen, with another deputy threatening to question the prime minister, months after the cabinet resigned over a similar request.

“The cabinet has approved the draft law in its final form and …. decided to send it to parliament,” the cabinet said after a meeting in a statement. Parliament is expected to debate the package on Tuesday, when deputies are scheduled to discuss the impact of the financial crisis on the OPEC member.

The draft law, which seeks to reinforce financial stability, includes articles on state guarantees to banks and ways to help troubled firms, the cabinet said without elaborating.

“The bill includes guarantees to safeguard public funds and stipulates deterrent criminal penalties for whoever deliberately conceals facts or misleads public entities or forges company data to make gains… from this law,” the statement added.

The government is facing increasing pressure from MPs to support troubled investment firms, which make up more than half of the country’s listed companies and have borrowed heavily to finance expansions during an oil boom in the past few years.

Top investment firm Global Investment House shocked the market last month by saying it had defaulted on most of its debt, while Islamic firm Investment Dar said it is seeking up to $ 1bn in loans to refinance its debt.

In a new escalation of the political standoff, deputy Ahmad Al-Mulaifi threatened on Thursday to question Prime Minister Sheikh Nasser al-Mohammad al-Sabah over alleged violations of public funds and what he called a failed state management.


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