Share |

AHAB sued Dubai-based bank over Al-Sanea “fraud”

Ahmed Hamad Algosaibi and Brothers Company (AHAB), one of Saudi Arabia's oldest family-owned conglomerates, has sued the Dubai-based Mashreq bank for not preventing a $9.2 billion "fraud" that AHAB claims has been committed against it.
 
The lawsuit was filed in New York yesterday and alleges the bank was "wilfully blind" to irregular currency swaps. The Saudi conglomerate is claiming the bank should have realised the profits were disproportionately high for the swaps being undertaken.
 
Eric Lewis, part of AHAB's legal council, said: "We don't know what they knew, but the circumstances of the transactions would have made them aware of a substantial risk that these were improper transactions."

The news follows Mashreq bank's own lawsuit against AHAB in May this year, which is claiming $150 million against AHAB for defaulting on its credit payments.
 
The swaps are allegedly part of a "massive fraud" committed by the head of a rival Saudi conglomerate Maan Al-Sanea (pictured) of the Saad Group while he was head of AHAB-owned company The International Banking Corporation (TIBC). AHAB sued the billionaire last month, accusing him of having misappropriated approximately $10 billion. (Click here to read our coverage of the story) The lawsuit against Mashreq only serves to further complicate AHAB's claims against Al-Sanea, which were due to be heard in court today.

Both conglomerates are currently attempting to restructure their massive debt. Problems began for AHAB in May when TIBC first defaulted on loan payments. The same month saw Al-Sanea's bank accounts frozen by the Saudi National Bank and the Saad Group's investment ratings cut, them removed by ratings agencies due to lack of information.
 
Much media attention was given to the nature of the relationship between the two family-owned Saudi conglomerates, particularly after AHAB's suit was filed directly against Al-Sanea. The case has proved damaging for banking stability in the region (click here to read our coverage of the story) so Saudi Arabia will watch closely to see how the case unfolds.

Want to get the latest family business news direct to your desktop? Click here and register to receive our weekly newsletter

Click here >>
Close