The British Banking Association (BAA) has criticised the Saudi authorities' handling of the ongoing dispute between family-run conglomerates Saad Group and Ahmad Hamad Algosaibi and Brothers (AHAB).
In a letter to the UK business minister Lord Davies, the BAA said the dispute is "doing enormous damage to the reputation of Saudi Arabia as a whole. What appears to have started as a family dispute is now bringing the whole business sector and Saudi system of corporate governance into disrepute."
Saad and AHAB are believed to owe up to $20 billion, although the actual figure is unknown, to banks across the world. AHAB blames Saad's billionaire owner Maan Al Sanea (pictured) for their financial trouble, accusing him of "massive ongoing fraud" in July in which they claim he "misappropriated approximately $10 billion as a result of his frauds." (Click here to read our coverage of the story)
The BAA urges Lord Davies to raise the concerns of banks when he visits the kingdom next month. "We would ask you to send a message that it is still possible for Saudi Arabia to step back from the brink of what is becoming a very serious blow to its reputation for fair dealing, by working constructively with all banks to find an early resolution," the letter continued.
Some international banks have already taken action against the groups, including a lawsuit filed against Al Sanea by the Ahil Bank of Kuwait in September. (Click here to read our coverage of the story)
The first signs of financial trouble at the Saad Group surfaced in May when Al Sanea had his bank accounts frozen by the Saudi National Bank. The situation deteriorated quickly for the company as questions were raised about its links to AHAB.
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