Family-run Saad Group and its billionaire owner Maan Al-Sanea are facing further questions about the group's financial activities from a new lawsuit filed against the group and Al-Sanea by the Al Ahil Bank of Kuwait (ABK).
ABK is suing the group and its owner for breach of contract and fraud, according to court papers filed in New York. The claim accuses Saad of breaking a $60 million agreement with the bank in 2007 and of falsifying credit letters. It said: "Unknown to ABK at the time, the defendants, who are at the centre of a multibillion dollar financial scandal in the Middle East, concealed numerous facts and circumstances concerning their financial situation."
Saudi Arabia-based Saad borrowed money from ABK under the pretext of buying building materials, "when in truth the money from Al Ahil Bank was being routed to defendants for unauthorised purposes having nothing to do with building materials," the claim stated.
ABK is seeking $25 million in compensation for the breach of contract and $100 million in damages for the fraud.
This is the latest in a series of high profile claims against Al-Sanea and his company, including an allegation of "massive fraud" by fellow family business Ahmed Hamad Algosaibi and Brothers Company (AHAB). AHAB accused Al-Sanea in July of misappropriating approximately $10 billion "as a result of his frauds". (Click here to read our coverage)
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 stability and links to AHAB. (Click here to read our coverage of the Saad Group and Al-Sanea)
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