Dow Chemical rebuffs bribery allegations from Kuwaiti Parliamentarian

"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," the company said in a statement, adding that "the contract between Dow Chemical and Petrochemicals Industries Co. (PIC) was entirely appropriate, as was Dow's conduct." The K-Dow JV disintegrated just a couple of days before the official launch, after political pressure in Kuwait had started to pile on the government, with accusations that it entered into expensive deals at a time of falling world market petrochemical product prices and while it was trying to find its way out of a prolonged government crisis.

Dow Chemical has said it intends to seek litigation in order to recoup at least a $2.5bn break-up fee, while the Kuwaiti side has said it withdrew before it was too late and should be without blame. Dow lost access to more than $7bn of Kuwaiti investments that would have been part of the deal and were supposed to be used to finance an acquisition made as part of the JV some months earlier.

Significance: The new Kuwaiti allegations seem to stem from parliament and are likely to have been brought up to undermine Dow's legal case, as well as to weaken those who have accused the deal's critics of wreaking havoc for Kuwait's international business reputation. If such indications existed—they still seem very imprecise—they would have been expected to have played a role in the earlier criticism of the deal. Now they sound more like a part of the inter-factional smear campaigns that increasingly plague the country's parliament.