30 January 2009 04:04 [Source: ICIS news]
SINGAPORE (ICIS news)--US giant Dow Chemicals has rejected allegations by members of the Kuwait parliament that it had paid bribes previously to secure the $17.4bn (€13.2bn) K-Dow joint venture, which collapsed late last year, media reports said on Friday.
"With due respect to the internal events in Kuwait, the Dow Chemical Company is highly offended about any suggestion of improper actions of Dow Chemical," Dow said in a statement issued to the Wall Street Journal.
"The contract between Dow Chemical and Petrochemicals Industries Co. (PIC) was entirely appropriate, as was Dow's conduct," it added.
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The US chemical major had signed a pivotal agreement with Kuwait’s Petrochemicals Industries Company (PIC) to create the K-Dow petrochemicals joint-venture back in December 2007 and was mulling global projects once it starts operations this year.
However, the deal was scrapped on 29 December when PIC walked away amid mounting internal political pressures that left Dow Chemicals $7.5bn short in proceeds that it should have received if the joint venture was formed.
The committee will also investigate any action punishable under the 1993 public funds protection law.
Dow is currently in the midst of pursuing a maximum $2.5bn compensation from PIC for the failed deal.
"Any investigation should be focused on PIC's failure to close the transaction," Dow said. "PIC needs to be responsible for its failure to close the transaction and we intend to hold those that interfered with this obligation accountable."
Dow currently has another joint venture with PIC - Equate Petrochemical Co – with each owning a 42.5% stake. Local investors hold the balance of the ownership.
($1 = €0.76)
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