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Algosaibi group accuses Maan Al-Sanea of “massive fraud”

Ahmed Hamad Algosaibi and Brothers Company (AHAB), one of Saudi Arabia's oldest family-owned conglomerates, has filed a lawsuit against Maan Al-Sanea (pictured), the head of another Saudi family company. The lawsuit accuses the billionaire leader of the Saad Group of having "misappropriated approximately $10 billion as a result of his frauds."
The strongly worded accusations continue: "Over many years, through massive forgery of documents and the provision of phoney confirmations and guarantees acting in concert with entities that he controlled, Al-Sanea fraudulently obtained money as a result of unauthorised non-commercial transactions with a variety of financial institutions in the US, Middle East and elsewhere."
However, a Saad Group spokesperson told the Financial Times: "We have not seen or been served with this claim. If we are served with such a claim, we will respond to it vigorously through specialist council, confident in both the true facts and the judicial process."
The lawsuit, filed in New York, also alleges that Al-Sanea is a senior executive of AHBA's financial services division, the Money Exchange. The Saad group claims it has no business links with AHAB "except on an arms' length commercial basis."
This is the latest development in the downward spiral of fortune experienced by these two Saudi families, and the most explicit suggestion yet that the two are in-fact linked. There has been much speculation during recent weeks over the nature of the relationship between the two companies.
Maan Al-Sanea had his bank accounts frozen in May by the Saudi national bank and the Saad Group then had their investment ratings removed due to lack of adequate information. In June the Saudi billionaire was forced to sell shares in the UK firm Berkley Homes in order to raise cash.
One of the reasons given by the Saad Group for its recent misfortune is "the failure of companies owned by a prominent family business." There was much speculation the prominent family business concerned is AHBA but the reports are unconfirmed by either family.
Meanwhile, AHBA's problems started in May when one of their subsidiary companies, The International Banking Corporation (TIBC), defaulted on payments. Media reports then suggested Al-Sanea was managing TIBC but these were again unconfirmed. AHBA is also reported to have debts of up to $9.2 billion.
The true extent of the links between the two families may only become apparent when court proceedings commence and each is forced to disclose the nature of their involvement with the other.
Saudi Arabia will watch closely while the dispute unfolds as the economy is feeling the effects of the instability. On Monday it announced the region's banks were suffering due to the debt of the country's family businesses.
For full analysis of the problems experienced by these two Saudi Arabian family businesses see the next edition of Campden FB. Not a subscriber? Click here subscribe.
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Related links
Saudi banks suffer due to family business debt
Saad Group forced to sell Berkley shares to raise capital


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