London-based The Sunday Telegraph broke the news on 19 December that the Bahraini authorities had lifted their travel ban on three British bankers, Alistair Macleod, Anthony James and Cliff Giddings, nearly 18 months after it was imposed in the wake of the collapse of Awal Bank, where they all worked.
Mr McLeod and Mr James each expressed their gratitude to the Crown Prince of Bahrain, Salman ibn Hamad ibn Isa al-Khalifa, for personally intervening to secure their release.
Read the full Sunday Telegraph story here.
Monday, December 20, 2010
Wednesday, December 8, 2010
Cayman Court rules on jurisdiction and contempt
As Britain's Financial Times and Abu Dhabi'sThe National have reported, an appeals court in the Cayman Islands has ruled that the Gosaibi-Maan Al-Sanea dispute should be heard in the country, over-ruling an earlier decision.
The same court lifted a contempt of court ruling against Mr Al-Sanea, which it had handed down in March of this year.
The ruling on jurisdiction was welcomed by AHAB. Their legal representative, Eric Lewis, was quoted by the Financial Times, saying: "We are extremely pleased that the Cayman Island Court of Appeal has recognized that this massive fraud claim should be tried in the Cayman Islands and that the parties should not be compelled to go to Saudi Arabia for the determination of preliminary issues". Maan Al-Sanea's representatives declined to comment.
The Cayman's ruling demonstrates just how muddied the waters have become, especially since a New York court earlier threw out AHAB's case, ruling that it should be heard in Saudi Arabia, where a committee has been analysing the case for more than a year. AHAB is also appealing that decision, while the Financial Times pointed out that Mr Al-Sanea can also appeal this latest ruling. As the Financial Times concludes, analysts have speculated that , given the apparent confusion, the dispute could "drag on for years".
Frank Kane, writing in The National, also looked at at the complexities of the case and its disputed jurisdiction, but made some particularly important observations about possible repercussions in Saudi Arabia.
As part of his judgement in the Cayman Court, Sir John Chadwick ruled that "there was no reason to expect the Saudi committee would reach a conclusion" on the dispute. "Nor", he argued, "was it possible to be confident that proceedings commenced in Saudi courts would lead to a decision determinative of (AHAB) claims against Mr Al Sanea within any measurable period, if at all."
Frank Kane argues that: "In layman's terms, he was telling the Saudis: "We've given you your chance but we're fed up waiting for you, so we're going to tackle it ourselves."
So, an intriguing ruling that throws up two immediate points of interest: first, as The National points out, "there are many chapters still to be in this Saudi saga."
Second, what will the reaction be in Saudi Arabia to the judge's seemingly unimpressed view of its committee? Their reaction will be something to watch...
Read the Financial Times report on their website (registration required) and read Frank Kane's editorial here.
The same court lifted a contempt of court ruling against Mr Al-Sanea, which it had handed down in March of this year.
The ruling on jurisdiction was welcomed by AHAB. Their legal representative, Eric Lewis, was quoted by the Financial Times, saying: "We are extremely pleased that the Cayman Island Court of Appeal has recognized that this massive fraud claim should be tried in the Cayman Islands and that the parties should not be compelled to go to Saudi Arabia for the determination of preliminary issues". Maan Al-Sanea's representatives declined to comment.
The Cayman's ruling demonstrates just how muddied the waters have become, especially since a New York court earlier threw out AHAB's case, ruling that it should be heard in Saudi Arabia, where a committee has been analysing the case for more than a year. AHAB is also appealing that decision, while the Financial Times pointed out that Mr Al-Sanea can also appeal this latest ruling. As the Financial Times concludes, analysts have speculated that , given the apparent confusion, the dispute could "drag on for years".
Frank Kane, writing in The National, also looked at at the complexities of the case and its disputed jurisdiction, but made some particularly important observations about possible repercussions in Saudi Arabia.
As part of his judgement in the Cayman Court, Sir John Chadwick ruled that "there was no reason to expect the Saudi committee would reach a conclusion" on the dispute. "Nor", he argued, "was it possible to be confident that proceedings commenced in Saudi courts would lead to a decision determinative of (AHAB) claims against Mr Al Sanea within any measurable period, if at all."
Frank Kane argues that: "In layman's terms, he was telling the Saudis: "We've given you your chance but we're fed up waiting for you, so we're going to tackle it ourselves."
So, an intriguing ruling that throws up two immediate points of interest: first, as The National points out, "there are many chapters still to be in this Saudi saga."
Second, what will the reaction be in Saudi Arabia to the judge's seemingly unimpressed view of its committee? Their reaction will be something to watch...
Read the Financial Times report on their website (registration required) and read Frank Kane's editorial here.
Tuesday, December 7, 2010
Ta'if Joins Twitter
Ta'if Info Center is pleased to annouce that it has joined Twitter. Follow us at http://twitter.com/taifinfocenter
Ta'if Editorial
Within the recent analysis by Mark Townsend, of Gerson Lehman, there was an important reference to an impending report by a company called Kroll, a British “risk consultancy company”. Kroll, it is believed was contracted by the Bahraini committee investigating AHAB's claims against Maan Al-Sanea.
As Mr Townsend notes, this report is 'much anticipated', not least, one would have to assume, than by the three British former Awal bankers who have been forbidden from leaving the country (though not charged) for well over a year.
Ta'if Information Center has commented frequently on the case of the three bankers, partly because it seems they are the most human factor effected by AHAB's allegations. One of the key points to note with regards this Kroll report is the case of HIBIS, another British investigative company that the three men are in the process of suing (see Ta'if article of June 2010). The bankers' allegations against HIBIS (of course, not yet heard in court) centre around two accusations: one, that they have been libelled; and two, that their confidentiality was breached when the HIBIS report was, they argue, leaked.
So, what of the Kroll report? Ta'if notes that Mr Townsend referred to its “potentially damaging findings”, though of course it has – we believe – yet to be submitted. We make no suggestion that anything untoward has occurred, but it is nonetheless interesting that the reports contents already seem to be the matter of negative speculation.
That could spell bad news for the Awal bankers. Given their past experiences, Ta'if wonders what steps they – and indeed the Bahraini committee – have taken this time round in the process to ensure that the report's conclusions are deemed fair by both parties (though of course the Hibis allegations are just that, allegations). Have the bankers insisted on complete transparency as to the report's authorship, independence and history? More importantly, will they receive it?
Kroll is a well-known and respected company. One would have to hope, therefore, that its report will be treated with the importance it deserves. The total independence of their findings must be beyond doubt, otherwise we, like the rest of those anticipating the report, will be, in the end, none the wiser.
As Mr Townsend notes, this report is 'much anticipated', not least, one would have to assume, than by the three British former Awal bankers who have been forbidden from leaving the country (though not charged) for well over a year.
Ta'if Information Center has commented frequently on the case of the three bankers, partly because it seems they are the most human factor effected by AHAB's allegations. One of the key points to note with regards this Kroll report is the case of HIBIS, another British investigative company that the three men are in the process of suing (see Ta'if article of June 2010). The bankers' allegations against HIBIS (of course, not yet heard in court) centre around two accusations: one, that they have been libelled; and two, that their confidentiality was breached when the HIBIS report was, they argue, leaked.
So, what of the Kroll report? Ta'if notes that Mr Townsend referred to its “potentially damaging findings”, though of course it has – we believe – yet to be submitted. We make no suggestion that anything untoward has occurred, but it is nonetheless interesting that the reports contents already seem to be the matter of negative speculation.
That could spell bad news for the Awal bankers. Given their past experiences, Ta'if wonders what steps they – and indeed the Bahraini committee – have taken this time round in the process to ensure that the report's conclusions are deemed fair by both parties (though of course the Hibis allegations are just that, allegations). Have the bankers insisted on complete transparency as to the report's authorship, independence and history? More importantly, will they receive it?
Kroll is a well-known and respected company. One would have to hope, therefore, that its report will be treated with the importance it deserves. The total independence of their findings must be beyond doubt, otherwise we, like the rest of those anticipating the report, will be, in the end, none the wiser.
Monday, November 29, 2010
Hague to raise bankers' case with Bahraini prince
A story on the website (29 November) of leading London newspaper, The Daily Telegraph, claims the UK's foreign secretary, William Hague, will again raise concerns again about the treatment of four British bankers, detained without charge in the Gulf emirate for 17 months since July last year, following the collapse of the banks where they worked. Read the full article here.
A spokesman for the Foreign and Commonwealth Office said Mr Hague would highlight Britain's worries about the men during a meeting in London on Tuesday with Salman ibn Hamad ibn Isa Al Khalifa, the Crown Prince and heir apparent to the King of Bahrain.
Read the Ta'if Info Center report in September here on Mr Hague's last attempt to raise the matter with the Bahrein government.
A spokesman for the Foreign and Commonwealth Office said Mr Hague would highlight Britain's worries about the men during a meeting in London on Tuesday with Salman ibn Hamad ibn Isa Al Khalifa, the Crown Prince and heir apparent to the King of Bahrain.
Read the Ta'if Info Center report in September here on Mr Hague's last attempt to raise the matter with the Bahrein government.
Ta'if Editorial
It is fair to say that Ta'if is becoming more than a little bit tired of some of the tactics being employed in this dispute. In fact we are positively bored, disappointed and frustrated. We are in no way the only ones.
Back in June of this year Euromoney Magazine wrote a commentary about a whole series of emails that it and many other media outlets had received from addresses that centre around the term 'fraudwatch'. Given the extent to which these emails attack Maan Al-Sanea, it is not hard to surmise that they are being sent by someone (or persons) who are sympathetic to the Gosaibis' claims. Far from being of any merit, however, as Euromoney reported back in June, all these emails demonstrate is that “the senders...might hold a slight degree of malice towards Al-Sanea.”
Sadly these emails have continued and we must assume are being sent to hundreds, if not thousands of people. They have also become a lot more sophisticated (although in this case, that's almost a contradiction in terms). The most recent message contained a mock flight safety card, drawn up to repeat the Gosabis' accusations against Al-Sanea. Ta'if will not be presenting this here because we believe it does not deserve any kind of oxygen. But we do want to echo Euromoney's sentiments.
This dispute is a serious one. It has had, and will have, serious ramifications. These emails have no place in it, nor indeed in any kind of 'campaign'.
More than anything we are bemused that the emails' authors – and we make no accusations as to who they may be – could possibly think they are influencing media and public opinion. The emails are so flagrantly, so blatantly, so unrepentantly biased that they cannot be having any effect. Which makes you wonder why someone is going to all this effort. It's laughable really, which is why we believe there is really only one way to describe this kind of tactic: beyond juvenile.
Ta'if will be treating any further fraudwatch emails that it receives with what they deserve: “Mark as spam”. We imagine we are not the only ones.
Read the original Euromoney article here.
Back in June of this year Euromoney Magazine wrote a commentary about a whole series of emails that it and many other media outlets had received from addresses that centre around the term 'fraudwatch'. Given the extent to which these emails attack Maan Al-Sanea, it is not hard to surmise that they are being sent by someone (or persons) who are sympathetic to the Gosaibis' claims. Far from being of any merit, however, as Euromoney reported back in June, all these emails demonstrate is that “the senders...might hold a slight degree of malice towards Al-Sanea.”
Sadly these emails have continued and we must assume are being sent to hundreds, if not thousands of people. They have also become a lot more sophisticated (although in this case, that's almost a contradiction in terms). The most recent message contained a mock flight safety card, drawn up to repeat the Gosabis' accusations against Al-Sanea. Ta'if will not be presenting this here because we believe it does not deserve any kind of oxygen. But we do want to echo Euromoney's sentiments.
This dispute is a serious one. It has had, and will have, serious ramifications. These emails have no place in it, nor indeed in any kind of 'campaign'.
More than anything we are bemused that the emails' authors – and we make no accusations as to who they may be – could possibly think they are influencing media and public opinion. The emails are so flagrantly, so blatantly, so unrepentantly biased that they cannot be having any effect. Which makes you wonder why someone is going to all this effort. It's laughable really, which is why we believe there is really only one way to describe this kind of tactic: beyond juvenile.
Ta'if will be treating any further fraudwatch emails that it receives with what they deserve: “Mark as spam”. We imagine we are not the only ones.
Read the original Euromoney article here.
Tuesday, November 16, 2010
Pressure Mounts on Algosaibi
An article dated 15 November 2010 posted on the website of international consultancy, Gerson Lehrman Group, claims that Ahmad Hamad Algosaibi & Brothers (AHAB) is under increasing pressure to strike a deal with banks.
The article by Dubai-based journalist and presenter of Business Breakfast on Dubai Eye 103.8 FM radio, Mark Townsend, states that AHAB has been told to decouple the ongoing legal proceedings and reach an immediate settlement with banks.
According to Townsend, AHAB's obvious preference for litigation outside the Kingdom has irked senior members of the Saudi establishment. The pressure to settle with banks is intense according to sources because of the impact the dispute is having on the Kingdom's political and business reputation.
Please click here to read Mark Townsend's full article.
A previous article by Mark Townsend (26 August 2010) on Gerson Lehrman Group's website, reported on the Ta'if Info Center, suggested that "now the dispute is back on home ground", Saudi Arabian royal family intervention was likely in the dispute between Saad Group and Ahmad Hamad Algosaibi Bros.
The article by Dubai-based journalist and presenter of Business Breakfast on Dubai Eye 103.8 FM radio, Mark Townsend, states that AHAB has been told to decouple the ongoing legal proceedings and reach an immediate settlement with banks.
According to Townsend, AHAB's obvious preference for litigation outside the Kingdom has irked senior members of the Saudi establishment. The pressure to settle with banks is intense according to sources because of the impact the dispute is having on the Kingdom's political and business reputation.
Please click here to read Mark Townsend's full article.
A previous article by Mark Townsend (26 August 2010) on Gerson Lehrman Group's website, reported on the Ta'if Info Center, suggested that "now the dispute is back on home ground", Saudi Arabian royal family intervention was likely in the dispute between Saad Group and Ahmad Hamad Algosaibi Bros.
Wednesday, October 20, 2010
LEWIS APPEARS BEFORE CONGRESS
Taif Info Center has been away for a few weeks, but in that time much has happened. Of particular note were events in America, where, in that country’s Congress, The House Committee on Financial Services held a meeting in its Sub-Committee’s review of “current and evolving trends in terrorist financing”.
What is the link to our dispute? Well, at that hearing on the 28th September Eric Lewis, legal counsel for the Al-Gosaibis, gave testimony. He used that opportunity to raise the accusations that his side have made against Maan Al-Sanea, whose lawyers were not giving evidence in front of the Committee.
As Mr Lewis said, “The fraud and money laundering scheme that I will discuss involves the transfer of approximately $1 trillion through the United States financial system, all directed by a Saudi national named Maan Al Sanea”.
Mr Lewis continued: “The two Bahraini banks—Awal Bank and The International Banking Corporation—had no legitimate customers; they were created and used by Al Sanea to borrow money and then funnel it through the U.S. financial system to dummy customers and then to his own companies.”
Mr Lewis put the accusations in the context of the hearing by leveling criticisms at Bank of America, which, he argued, wholly failed to conduct due diligence on the sums allegedly transferred between it and Mr Al-Sanea.
Raising AHAB’s allegations against Maan Al-Sanea in such a forum (in which such a subject is being discussed) was obviously a serious matter. In a National story about the hearing that was published a day before the hearing Saad’s spokespeople declined to comment.
Taif Info Center does express surprise that Mr Al-Sanea was not given an opportunity to respond to Mr Lewis’s accusations, especially given his denial of all of AHAB’s allegations. That was something that the Chairman of the Committee, Congressman Dennis Moore recognized in his opening statement:
“There are some allegations in the written testimony where parties not present are named and accused. We’re not a court of law and we cannot engage in fact finding in this setting. We do not have all the facts nor the response of those . . . if we don’t have the response from those named. Opinions expressed and allegations made must be viewed within that context, and we’ll leave the record of the hearing open to afford any party named an opportunity to present their own response and their side of the story.”
It will be interesting to see if Maan Al-Sanea takes up this invitation…
Read a full transcript of Eric Lewis’s oral testimony here.
View a webcast of the hearing, including Congressman Moore’s opening comments here.
Read The National report about the hearing here.
Tuesday, September 14, 2010
UK urges action on British bankers held in Bahrain
An article in the UK’s Telegraph newspaper claims that the British government has appealed to Bahrain to speed up an investigation into three British bankers held in the Gulf emirate for more than a year, saying it is "concerned" with the length of time they have been barred from leaving the country.
The Telegraph article comes soon after a previous article in the Gulf Daily News (see post immediately below) foreshadowing diplomatic moves after the recent visit by the UK’s foreign minister, William Hague.
The Telegraph’s Harry Wilson claims that in a letter to the men's lawyers, seen by The Sunday Telegraph, the UK’s government has appealed directly to Bahrain's authorities to resolve the case "as quickly as possible". Jamie Bowden, Britain's ambassador to Bahrain, has also discussed the case with senior officials, claims the Telegraph.
Read the full Telegraph article here.
The Telegraph article comes soon after a previous article in the Gulf Daily News (see post immediately below) foreshadowing diplomatic moves after the recent visit by the UK’s foreign minister, William Hague.
The Telegraph’s Harry Wilson claims that in a letter to the men's lawyers, seen by The Sunday Telegraph, the UK’s government has appealed directly to Bahrain's authorities to resolve the case "as quickly as possible". Jamie Bowden, Britain's ambassador to Bahrain, has also discussed the case with senior officials, claims the Telegraph.
Read the full Telegraph article here.
Wednesday, September 8, 2010
Hope for British bankers detained in Bahrain?
Three British bankers who have been banned for more than a year from leaving Bahrain, without any charges being brought against them, appear hopeful that the UK’s new foreign secretary, William Hague, will use his friendly links with Bahrain to take up their case.
William Hague visited Bahrain in July and tweeted at the time that he had had a “short stop in Bahrain on the way back from Kabul to meet the Crown Prince of Bahrain and my friend and colleague the Foreign Minister.”
According to the Bahrain-based newspaper, the Gulf Daily News (6 September 2010), the three bankers have now written to the foreign secretary asking for help. Government sources in the UK confirm that the men will receive a response, unlike from the previous foreign secretary, David Milliband.
The three bankers Alistair MacLeod, Anthony James and Cliff Giddings worked as senior managers at Awal Bank until its collapse last year. The well-connected Gulf Daily News reported earlier that prosecutors had imposed a travel ban on Bahrain-based senior executives as investigations continued into the bank's closure in July last year. However, it is understood the three men have not been formally charged with a crime.
Awal Bank was owned by Saudi billionaire Maan Al Sanea, who is being sued by his wife's family, the Algosaibis, over allegations that he perpetrated a $10bn fraud. Separately, Abu Dhabi's The National newspaper reported on 3 August 2010 that recent Cayman and US court rulings meant claims by the Al Gosaibi group against Mr al Sanea should be heard and decided in Saudi Arabia.
Click here to read the Gulf Daily News article
William Hague visited Bahrain in July and tweeted at the time that he had had a “short stop in Bahrain on the way back from Kabul to meet the Crown Prince of Bahrain and my friend and colleague the Foreign Minister.”
According to the Bahrain-based newspaper, the Gulf Daily News (6 September 2010), the three bankers have now written to the foreign secretary asking for help. Government sources in the UK confirm that the men will receive a response, unlike from the previous foreign secretary, David Milliband.
The three bankers Alistair MacLeod, Anthony James and Cliff Giddings worked as senior managers at Awal Bank until its collapse last year. The well-connected Gulf Daily News reported earlier that prosecutors had imposed a travel ban on Bahrain-based senior executives as investigations continued into the bank's closure in July last year. However, it is understood the three men have not been formally charged with a crime.
Awal Bank was owned by Saudi billionaire Maan Al Sanea, who is being sued by his wife's family, the Algosaibis, over allegations that he perpetrated a $10bn fraud. Separately, Abu Dhabi's The National newspaper reported on 3 August 2010 that recent Cayman and US court rulings meant claims by the Al Gosaibi group against Mr al Sanea should be heard and decided in Saudi Arabia.
Click here to read the Gulf Daily News article
Wednesday, September 1, 2010
Riyadh likely to intervene
A recent article by Dubai-based journalist, Mark Townsend, posted on consultants Gerson Lehrman Group's website, suggests that "now the dispute is back on home ground", Saudi Arabian royal family intervention is likely in the dispute between Saad Group and Ahmad Hamad Algosaibi Bros.
The article claims "now that both the Cayman Islands and New York have ruled over jurisdiction, the case is likely to see faster progress towards settlement. Events will probably gather pace immediately after the Eid celebrations that follow the muslim holy month of Ramadan."
Mark Townsend is a well-known journalist based in Dubai and is a presenter of Business Breakfast on Dubai-Eye 103.8 FM. He is also Editor-at-Large to Complinet, a regulatory news service, and has served as the Business and Economics Editor at Khaleej Times in Dubai, the Dubai affiliate of the International Herald Tribune. He has interviewed some of the world's foremost politicians and business leaders and attended the World Economic Forum as a Media Leader.
Read the full article here
The article claims "now that both the Cayman Islands and New York have ruled over jurisdiction, the case is likely to see faster progress towards settlement. Events will probably gather pace immediately after the Eid celebrations that follow the muslim holy month of Ramadan."
Mark Townsend is a well-known journalist based in Dubai and is a presenter of Business Breakfast on Dubai-Eye 103.8 FM. He is also Editor-at-Large to Complinet, a regulatory news service, and has served as the Business and Economics Editor at Khaleej Times in Dubai, the Dubai affiliate of the International Herald Tribune. He has interviewed some of the world's foremost politicians and business leaders and attended the World Economic Forum as a Media Leader.
Read the full article here
Friday, August 13, 2010
American links the key to AHAB efforts?
Now that the New York Supreme Court has ordered the AHAB-Saad Group dispute to be heard back in Saudi Arabia questions should be asked as to what prompted Saud Al Gosaibi's ultimately fruitless decision to pursue the case in the USA.
AHAB argues that the original decision to try to use the US judicial system was made by Mashreq Bank, with their own counter-suit against Maan Al-Sanea tacked on to that. That is certainly the order of events. However, given the obvious risks of jurisdiction (obvious, perhaps, with hindsight) the decision to pursue their claim in America must, we assume, have been very carefully considered. So, what other factors may have influenced that decision?
For now we can only speculate, but one theory - and it must remain that - is that the decision to try to use the US courts was part of a wider strategy that saw America as a country in which other influences could be brought to bear.
AHAB's chief lawyer, Eric Lewis (of Baach Robinson and Lewis PLLC) has been a key player throughout. Mr Lewis is no stranger to the Saudi Arabian legal system; indeed, his company biography states that he obtained a judgement that was "enforced through the courts of Saudi Arabia, the first non-Arab League judgment ever enforced in that country. "One might assume, therefore, that in hiring Mr Lewis AHAB was bringing on to its team a lawyer who would be able to help them in their claim in the country in which it was alleged to have been perpetrated. That the decision was then taken to pursue the case in the USA reinforces the view that there must have been other factors at play.
While Mr Lewis is a Middle Eastern expert, he is, of course, primarily a prominent American litigator. Furthermore, he is a very well connected American litigator. For example, an interesting fact is that, in 2007, Mr Lewis married Emily Spitzer, sister of Eliot Spitzer, who was the Governor of New York from 2007-08, when he was forced to resign after it emerged he had been involved as a client in a prostitution ring.
Could Mr Lewis's high-profile political connections, therefore, have influenced the decision to try AHAB's claim in America? Could they explain the involvement of Senator Peter King (see Taif Info Center "US Banks in Spotlight - May 11 2010)? Could Mr Lewis's influence explain another interesting fact - the reluctance of news agency Reuters (Thomson Reuters is, of course, headquartered in Manhattan) to, as yet, report the Supreme Court's decision with regards jurisdiction?
These, for now, must remain unanswered questions. However, the fact that this dispute is so high-profile could indicate that public relations considerations - as much as legal options - were a driving force behind many of both sides' actions. One thing that does seem certain, however, is that - as ever - there is more to this dispute than meets the eye.
AHAB argues that the original decision to try to use the US judicial system was made by Mashreq Bank, with their own counter-suit against Maan Al-Sanea tacked on to that. That is certainly the order of events. However, given the obvious risks of jurisdiction (obvious, perhaps, with hindsight) the decision to pursue their claim in America must, we assume, have been very carefully considered. So, what other factors may have influenced that decision?
For now we can only speculate, but one theory - and it must remain that - is that the decision to try to use the US courts was part of a wider strategy that saw America as a country in which other influences could be brought to bear.
AHAB's chief lawyer, Eric Lewis (of Baach Robinson and Lewis PLLC) has been a key player throughout. Mr Lewis is no stranger to the Saudi Arabian legal system; indeed, his company biography states that he obtained a judgement that was "enforced through the courts of Saudi Arabia, the first non-Arab League judgment ever enforced in that country. "One might assume, therefore, that in hiring Mr Lewis AHAB was bringing on to its team a lawyer who would be able to help them in their claim in the country in which it was alleged to have been perpetrated. That the decision was then taken to pursue the case in the USA reinforces the view that there must have been other factors at play.
While Mr Lewis is a Middle Eastern expert, he is, of course, primarily a prominent American litigator. Furthermore, he is a very well connected American litigator. For example, an interesting fact is that, in 2007, Mr Lewis married Emily Spitzer, sister of Eliot Spitzer, who was the Governor of New York from 2007-08, when he was forced to resign after it emerged he had been involved as a client in a prostitution ring.
Could Mr Lewis's high-profile political connections, therefore, have influenced the decision to try AHAB's claim in America? Could they explain the involvement of Senator Peter King (see Taif Info Center "US Banks in Spotlight - May 11 2010)? Could Mr Lewis's influence explain another interesting fact - the reluctance of news agency Reuters (Thomson Reuters is, of course, headquartered in Manhattan) to, as yet, report the Supreme Court's decision with regards jurisdiction?
These, for now, must remain unanswered questions. However, the fact that this dispute is so high-profile could indicate that public relations considerations - as much as legal options - were a driving force behind many of both sides' actions. One thing that does seem certain, however, is that - as ever - there is more to this dispute than meets the eye.
Monday, August 9, 2010
Court rulings put spotlight back on Saudi Arabia
Abu Dhabi's The National reported on 3 August 2010 that the thrust of recent Cayman and US court rulings is that the claims by the Al Gosaibi group against Mr al Sanea should be heard and decided in the Middle East, and that Saudi Arabia is the appropriate location.
Some commentators are claiming that "AHAB blew this thing up and now it has returned home where, arguably, it should have been dealt with in the first place."
The National's Frank Kane writes: "Two court rulings last week, one in the Cayman Islands, the other in New York, have thrown the spotlight back on Saudi Arabia in the region’s longest-running corporate confrontation – the stand-off between the al Gosaibi family and one of its members by marriage, Maan al Sanea, the head of the Saad Group."
Mr Kane states: "Observers such as bankers, lawyers, accountants, investigators and media people interpreted the Cayman and New York rulings as good for Mr al Sanea. From the beginning he has insisted the kingdom was the appropriate place for the matter to be decided and he feels he will get a fairer hearing there."
Read the full article here .
Some commentators are claiming that "AHAB blew this thing up and now it has returned home where, arguably, it should have been dealt with in the first place."
The National's Frank Kane writes: "Two court rulings last week, one in the Cayman Islands, the other in New York, have thrown the spotlight back on Saudi Arabia in the region’s longest-running corporate confrontation – the stand-off between the al Gosaibi family and one of its members by marriage, Maan al Sanea, the head of the Saad Group."
Mr Kane states: "Observers such as bankers, lawyers, accountants, investigators and media people interpreted the Cayman and New York rulings as good for Mr al Sanea. From the beginning he has insisted the kingdom was the appropriate place for the matter to be decided and he feels he will get a fairer hearing there."
Read the full article here .
Friday, July 30, 2010
USA Judge Throws Out Lawsuits
Just days after a similar judgement in the Cayman Islands (see our previous post), New York's Supreme Court has dealt a further blow to AHAB in its dispute against Maan Al-Sanea, with the judge "throwing out" several lawsuits relating to it.
As The National newspapers reports, "Justice Richard B Lowe III of the New York Supreme Court ruled that an action brought by the UAE's Mashreqbank should be heard in the Emirates, where parallel action is already taking place, and not in New York. He also said Saudi Arabia could be the appropriate place for other parts of the allegations to be tested."
And as The Wall Street Journal reports, "The U.A.E. (United Arab Emirates) is the more appropriate forum for determination of the primary actions, and they will be decided in the case that Mashreqbank has already commenced there," the judge said. "Ahab can decide whether it prefers to bring its third-party action in the U.A.E. as well, or to seek redress in Saudia Arabia." Part of Justice Lowe's ruling was based upon the fact that many witnesses were not residing in New York and that it would be more convenient for them to appear in a Middle Eastern court.
In response to the judgement, AHAB's lawyer, Eric Lewis, made the point that his clients had not chosen to litigate in the USA, but rather that decision was taken by Mashreqbank, when it decided to sue Mr Lewis's clients. The National goes on to report that "Mr Lewis stated that AHAB believes the decision is wrong as a matter of both law and policy and that it is considering its options."
According to the WSJ, Robert Serio - a lawyer for Mr Al-Sanea, said: "We are pleased with the court's ruling and, in particular, with its recognition that the Kingdom of Saudi Arabia is the better forum for the resolution of the parties' differences."
Mashreqbank said in a statement that its claims "remain indisputable and we will continue to aggressively pursue those claims in the U.A.E. courts."
So, this lengthy American chapter of events appears to have drawn to a close (although Mr Lewis did say his clients would consider an appeal). Questions will now be asked not only as to what happens next - in Saudi Arabia - but also how quickly a resolution to this dispute can be found, especially as the argument over jurisdiction has already taken some time.
Taif Info Center will be summarising Justice Lowe's judgement in the coming days, with a story appearing in our Legalities page.
Meanwhile, the original National report can be read here, while the Wall Street Journal can be read here.
As The National newspapers reports, "Justice Richard B Lowe III of the New York Supreme Court ruled that an action brought by the UAE's Mashreqbank should be heard in the Emirates, where parallel action is already taking place, and not in New York. He also said Saudi Arabia could be the appropriate place for other parts of the allegations to be tested."
And as The Wall Street Journal reports, "The U.A.E. (United Arab Emirates) is the more appropriate forum for determination of the primary actions, and they will be decided in the case that Mashreqbank has already commenced there," the judge said. "Ahab can decide whether it prefers to bring its third-party action in the U.A.E. as well, or to seek redress in Saudia Arabia." Part of Justice Lowe's ruling was based upon the fact that many witnesses were not residing in New York and that it would be more convenient for them to appear in a Middle Eastern court.
In response to the judgement, AHAB's lawyer, Eric Lewis, made the point that his clients had not chosen to litigate in the USA, but rather that decision was taken by Mashreqbank, when it decided to sue Mr Lewis's clients. The National goes on to report that "Mr Lewis stated that AHAB believes the decision is wrong as a matter of both law and policy and that it is considering its options."
According to the WSJ, Robert Serio - a lawyer for Mr Al-Sanea, said: "We are pleased with the court's ruling and, in particular, with its recognition that the Kingdom of Saudi Arabia is the better forum for the resolution of the parties' differences."
Mashreqbank said in a statement that its claims "remain indisputable and we will continue to aggressively pursue those claims in the U.A.E. courts."
So, this lengthy American chapter of events appears to have drawn to a close (although Mr Lewis did say his clients would consider an appeal). Questions will now be asked not only as to what happens next - in Saudi Arabia - but also how quickly a resolution to this dispute can be found, especially as the argument over jurisdiction has already taken some time.
Taif Info Center will be summarising Justice Lowe's judgement in the coming days, with a story appearing in our Legalities page.
Meanwhile, the original National report can be read here, while the Wall Street Journal can be read here.
Thursday, July 29, 2010
Al Gosaibis suffer Cayman 'blow'
News agencies have reported a major disappointment for AHAB in its dispute against the Saad Group and Maan Al-Sanea. As Asa Fitch in The National writes: “A Cayman Islands judge has put a multibillion-dollar fraud claim against Maan al Sanea on hold until authorities in Saudi Arabia reach a decision on the main allegations against the financier. The ruling is a blow to the al Gosaibi family, which has accused Mr al Sanea of running an immense Ponzi scheme.”
The Cayman Islands judge, Chief Justice of the Cayman Islands Grand Court Anthony Smellie, ruled that although Mr al Sanea was properly included in the Cayman lawsuit, “Saudi Arabia may be an available forum, and if so, would be the more appropriate forum for the trial of the underlying allegations of fraud raised personally against him”.
As Taif Info Center has reported in the past, the question of jurisdiction was always likely to be an important factor, with lawyers for Mr Al Sanea arguing all along that the cases should be heard in Saudi. This decision, therefore, could have big consequences and all eyes will now turn to the other jurisdictions – especially New York – where AHAB has launched lawsuits against Maan Al-Sanea.
Chief Justice Smellie upheld the worldwide $9.2 billion freezing order on Al Sanea's assets, ruling that it would remain in effect during the stay in proceedings that he had ordered.
According to Camilla Hall of Bloomberg, AHAB said in a statement that it was “considering the scope” of Smellie’s decision, which directed it to explore whether some of the issues in the case could be tried in Saudi Arabia.
Bloomberg reports that the Saad Group “applauded the decision”, saying in an e-mailed statement that “Saudi Arabia is the correct forum for the principal issues in this dispute to be resolved.”
It seems the Cayman Court has agreed with the Group.
Read The National report here.
Read Bloomberg's story here.
The Cayman Islands judge, Chief Justice of the Cayman Islands Grand Court Anthony Smellie, ruled that although Mr al Sanea was properly included in the Cayman lawsuit, “Saudi Arabia may be an available forum, and if so, would be the more appropriate forum for the trial of the underlying allegations of fraud raised personally against him”.
As Taif Info Center has reported in the past, the question of jurisdiction was always likely to be an important factor, with lawyers for Mr Al Sanea arguing all along that the cases should be heard in Saudi. This decision, therefore, could have big consequences and all eyes will now turn to the other jurisdictions – especially New York – where AHAB has launched lawsuits against Maan Al-Sanea.
Chief Justice Smellie upheld the worldwide $9.2 billion freezing order on Al Sanea's assets, ruling that it would remain in effect during the stay in proceedings that he had ordered.
According to Camilla Hall of Bloomberg, AHAB said in a statement that it was “considering the scope” of Smellie’s decision, which directed it to explore whether some of the issues in the case could be tried in Saudi Arabia.
Bloomberg reports that the Saad Group “applauded the decision”, saying in an e-mailed statement that “Saudi Arabia is the correct forum for the principal issues in this dispute to be resolved.”
It seems the Cayman Court has agreed with the Group.
Read The National report here.
Read Bloomberg's story here.
Wednesday, July 28, 2010
Saad Group Must Pay $33.1m Over Swaps
Bloomberg has reported that the Saad Group must pay $33.1 million to Abu Dhabi Commercial Bank PGSC for "defaulting on a foreign currency swap agreement."
The ruling was made by a UK Judge in London this week and is believed to be the first such ruling. Bloomberg reports that Saad defaulted when its credit rating was withdrawn in July 2009.
Bloomberg says that Saad argued in court that the default "applied to other deals between the companies and not to the 2008 swap created for Saad to hedge against future currency fluctuations." Their defenses were reportedly dismissed by the Judge as 'hopeless'.
Read the original Bloomberg report here.
The ruling was made by a UK Judge in London this week and is believed to be the first such ruling. Bloomberg reports that Saad defaulted when its credit rating was withdrawn in July 2009.
Bloomberg says that Saad argued in court that the default "applied to other deals between the companies and not to the 2008 swap created for Saad to hedge against future currency fluctuations." Their defenses were reportedly dismissed by the Judge as 'hopeless'.
Read the original Bloomberg report here.
Thursday, July 15, 2010
Saudi court dismisses AHAB claim
Saudi Arabian news outlets have reported a new development in the Al Gosaibi - Saad Group dispute, that comes as a blow to AHAB's claims against Maan Al-Sanea.
The Al Sharq El Awsat newspaper reports that the country's Administrative Court in the Eastern Province has dismissed the AHAB claim against Maan Al-Sanea that he acted fradulently with regards the acquisition and profits from shares in Samba Financial Group. The newspaper states that the verdict was delivered because of a 'lack of claim'.
Al Sharq El Awsat reports that laywer, Bader el Bassis, commented to the paper that this verdict represents the almost the final decision on this matter, though the Al Gosaibis may lodge an appeal during the period of objection. Though they may well do so, it is hard to deny that this verdict in the Saudi court must be a major disappointment.
Read the original Al Sharq report (in Arabic) here.
The Al Sharq El Awsat newspaper reports that the country's Administrative Court in the Eastern Province has dismissed the AHAB claim against Maan Al-Sanea that he acted fradulently with regards the acquisition and profits from shares in Samba Financial Group. The newspaper states that the verdict was delivered because of a 'lack of claim'.
Al Sharq El Awsat reports that laywer, Bader el Bassis, commented to the paper that this verdict represents the almost the final decision on this matter, though the Al Gosaibis may lodge an appeal during the period of objection. Though they may well do so, it is hard to deny that this verdict in the Saudi court must be a major disappointment.
Read the original Al Sharq report (in Arabic) here.
Thursday, July 8, 2010
Al Gosaibi prepared to sell assets to pay debt
An article published in Abu Dhabi's The National, June 26, claimed that the al Gosaibi family of Saudi Arabia was prepared to sell "much of its 70-year-old business empire to help pay its creditors, informed sources say."
The article by The National's Frank Kane stated "The family behind Ahmad Hamad Al Gosaibi and Brothers is offering creditors 20 cents on the dollar on US$9 billion (Dh33.05bn) of liabilities, funded by a disposal of assets, plus any proceeds of the family’s lawsuits against Maan al Sanea, a businessman and relative by marriage whom they accuse of defrauding the Al Gosaibi business. Mr al Sanea, the head of the Saad Group, has denied the allegations."
Read the full article here.
The article by The National's Frank Kane stated "The family behind Ahmad Hamad Al Gosaibi and Brothers is offering creditors 20 cents on the dollar on US$9 billion (Dh33.05bn) of liabilities, funded by a disposal of assets, plus any proceeds of the family’s lawsuits against Maan al Sanea, a businessman and relative by marriage whom they accuse of defrauding the Al Gosaibi business. Mr al Sanea, the head of the Saad Group, has denied the allegations."
Read the full article here.
Tuesday, June 29, 2010
Financial traffic between KSA and Bahrain produces wreck
According to the international business magazine, The Economist, the financial traffic between the the Kingdom of Saudi Arabia produced a terrible wreck last year - one of the worst in the history of banking in the Gulf.
The Economist article, published June 24, says in May 2009 The International Banking Corporation (TIBC), a Bahrain bank owned by a venerable Saudi merchant family, the Gosaibis, defaulted on its obligations. The default was an early sign that its parent, the Ahmad Hamad Algosaibi & Brothers Group (AHAB), was in financial trouble.
Read the full Economist article here.
The Economist article, published June 24, says in May 2009 The International Banking Corporation (TIBC), a Bahrain bank owned by a venerable Saudi merchant family, the Gosaibis, defaulted on its obligations. The default was an early sign that its parent, the Ahmad Hamad Algosaibi & Brothers Group (AHAB), was in financial trouble.
Read the full Economist article here.
First Gulf Bank suing Al Gosaibi for Dh58.7m - details 'secret'
Following the recent news that a lawsuit had been launched against AHAB by the bankruptcy lawyers administering their own bank, The International Banking Corporation (TIBC), Abu Dhabi's The National newspaper now reports that First Gulf Bank, the UAE’s fourth-largest bank by assets, is suing the troubled Saudi conglomerate, Ahmad Hamad Al Gosaibi and Brothers, over an alleged default on Dh58.7 million (US$15.98m) of loans.
The lawsuit, lodged in the Abu Dhabi Court of First Instance last year, seeks recovery of the value of the loans plus lawyers’ fees and interest, court documents obtained by The National show.
The lawsuit names Al Gosaibi’s trading business in Dubai and its parent company in Saudi Arabia as defendants.
Representatives of First Gulf Bank and the Al Gosaibi group could not be reached for comment. But a lawyer at Hilal and Associates in Abu Dhabi, which is acting for First Gulf Bank, said the case was still in the Court of First Instance and that no judgment had yet been made. He confirmed the Dh58.7m default claim but said the remaining details of the case were “secret”.
Read the full article by The National's Asa Fitch here.
The lawsuit, lodged in the Abu Dhabi Court of First Instance last year, seeks recovery of the value of the loans plus lawyers’ fees and interest, court documents obtained by The National show.
The lawsuit names Al Gosaibi’s trading business in Dubai and its parent company in Saudi Arabia as defendants.
Representatives of First Gulf Bank and the Al Gosaibi group could not be reached for comment. But a lawyer at Hilal and Associates in Abu Dhabi, which is acting for First Gulf Bank, said the case was still in the Court of First Instance and that no judgment had yet been made. He confirmed the Dh58.7m default claim but said the remaining details of the case were “secret”.
Read the full article by The National's Asa Fitch here.
Monday, June 21, 2010
Bahrain: Al Gosaibis face new lawsuit
News outlets have reported yet another lawsuit to be launched as banks seek to recover money owed to them. Intriguingly, however, this new lawsuit has been launched against AHAB by the bankruptcy lawyers administering their own bank, The International Banking Corporation (TIBC).
The National reports that "Trowers and Hamlins, the London law firm appointed by the Central Bank of Bahrain to run TIBC after it failed last year, filed the claim with a judicial committee in Saudi Arabia." The claim runs to US$720 million (Dh2.64 billion).
Abdullah Mutawi, the Trowers and Hamlins lawyer who is leading the recovery effort, said that: “These claims form the first in a series of litigation proceedings which will be brought in a variety of jurisdictions around the world against those debtors of TIBC including [the Al Gosaibi group] – the single biggest debtor owing $3.2bn”...[They] will ultimately support the process of asset realisation for the benefit of the creditors of TIBC, who include international and local banks owed in the order of $2.6bn. Further claims will be lodged in the coming weeks and months.”
Mr Mutawi went on to say that the claim followed “unsatisfactory responses from [the Al Gosaibi group] and their representatives to questions relating to the assets of TIBC that we have repeatedly asked them”.
The law firm has also revealed that it launched a similar case in April with the Negotiable Instruments Committee in Saudi Arabia against Saad Trading, a Saad Group subsidiary, for $117m.
In response, Jim Courtovich said that the Al Gosaibis rejected claims made by Trowers and Hamlins “on every level”.“Trowers and Hamlins’ rhetoric simply ignores [the Al Gosaibi group’s] multiple offers to enter into a co-operative information sharing agreement …” he told The National.
Read the original National article here.
The National reports that "Trowers and Hamlins, the London law firm appointed by the Central Bank of Bahrain to run TIBC after it failed last year, filed the claim with a judicial committee in Saudi Arabia." The claim runs to US$720 million (Dh2.64 billion).
Abdullah Mutawi, the Trowers and Hamlins lawyer who is leading the recovery effort, said that: “These claims form the first in a series of litigation proceedings which will be brought in a variety of jurisdictions around the world against those debtors of TIBC including [the Al Gosaibi group] – the single biggest debtor owing $3.2bn”...[They] will ultimately support the process of asset realisation for the benefit of the creditors of TIBC, who include international and local banks owed in the order of $2.6bn. Further claims will be lodged in the coming weeks and months.”
Mr Mutawi went on to say that the claim followed “unsatisfactory responses from [the Al Gosaibi group] and their representatives to questions relating to the assets of TIBC that we have repeatedly asked them”.
The law firm has also revealed that it launched a similar case in April with the Negotiable Instruments Committee in Saudi Arabia against Saad Trading, a Saad Group subsidiary, for $117m.
In response, Jim Courtovich said that the Al Gosaibis rejected claims made by Trowers and Hamlins “on every level”.“Trowers and Hamlins’ rhetoric simply ignores [the Al Gosaibi group’s] multiple offers to enter into a co-operative information sharing agreement …” he told The National.
Read the original National article here.
Wednesday, June 16, 2010
Bahrain court: Al Gosaibi documents not forged
An article posted earlier today on the website of Abu Dhabi newspaper, The National, reports that a Bahraini tribunal has ruled that key documents in the AHAB/ Maan al Sanea dispute were not forged, as has been alleged.
The article by The National’s Frank Kane and Asa Fitch reported earlier today that lawyers working for Ahmad Hamad Al Gosaibi and Brothers, the Saudi Arabian conglomerate, have alleged that Maan al Sanea, a Saudi billionaire, forged signatures on financial documents to commit a US$10 billion (Dh36.72bn) fraud against the group. Al Gosaibi claimed the signatures on three financial documents – two credit facility letters and one guarantee agreement – were not signed by Suleiman Hamad al Gosaibi, the late chairman of the family conglomerate, but were forgeries. The documents were all dated June 29 2008.
Mr al Sanea has consistently denied the allegations.
The recently formed Bahrain chamber for dispute resolution (BCDR) ruled at the end of last month there was no evidence to show the signatures were not genuine. “The tribunal is satisfied … the signatures which are alleged to be forged are actually genuine and written under the hand of the deceased, Suleiman Hamad Ahmad al Gosaibi, and the tribunal concludes from the circumstances of the case, and the papers submitted thereon, that there are no merits to support the allegation of forgery,” the BCDR ruled.
The ruling represents a reverse for the al Gosaibi family in its legal actions against Mr al Sanea and his company, the Saad Group. Forgery allegations have been a key part of Al Gosaibi’s case against Mr al Sanea. It alleged he had forged the financial documents as the former chairman was terminally ill and undergoing medical treatment. The claims were supported by the accounting firm Deloitte, which investigated the allegations on behalf of Al Gosaibi and hired a specialist graphologist, the UK-based Dr Audrey Giles, who found there was evidence of forgery.
It will be interesting to see the implications of this Bahraini ruling on the dispute in other jurisdictions.
Click here for the full article in The National.
The article by The National’s Frank Kane and Asa Fitch reported earlier today that lawyers working for Ahmad Hamad Al Gosaibi and Brothers, the Saudi Arabian conglomerate, have alleged that Maan al Sanea, a Saudi billionaire, forged signatures on financial documents to commit a US$10 billion (Dh36.72bn) fraud against the group. Al Gosaibi claimed the signatures on three financial documents – two credit facility letters and one guarantee agreement – were not signed by Suleiman Hamad al Gosaibi, the late chairman of the family conglomerate, but were forgeries. The documents were all dated June 29 2008.
Mr al Sanea has consistently denied the allegations.
The recently formed Bahrain chamber for dispute resolution (BCDR) ruled at the end of last month there was no evidence to show the signatures were not genuine. “The tribunal is satisfied … the signatures which are alleged to be forged are actually genuine and written under the hand of the deceased, Suleiman Hamad Ahmad al Gosaibi, and the tribunal concludes from the circumstances of the case, and the papers submitted thereon, that there are no merits to support the allegation of forgery,” the BCDR ruled.
The ruling represents a reverse for the al Gosaibi family in its legal actions against Mr al Sanea and his company, the Saad Group. Forgery allegations have been a key part of Al Gosaibi’s case against Mr al Sanea. It alleged he had forged the financial documents as the former chairman was terminally ill and undergoing medical treatment. The claims were supported by the accounting firm Deloitte, which investigated the allegations on behalf of Al Gosaibi and hired a specialist graphologist, the UK-based Dr Audrey Giles, who found there was evidence of forgery.
It will be interesting to see the implications of this Bahraini ruling on the dispute in other jurisdictions.
Click here for the full article in The National.
Wednesday, June 9, 2010
Ex-TIBC chief fled Bahrain to avoid 'arbitrary actions'
The American former head of the Bahrain bank, TIBC, who broke travel restrictions and fled the country last month, has surfaced in his Californian home. In a dramatic twist, Glenn Stewart has told Abu Dhabi newspaper, The National, June 8, that he fled the region because he "did not want any longer to be subject to the arbitrary actions and retaliations of the Bahrain legal system. The only way to fight this was to get out of the country.”
According to the article by The National's Frank Kane, Mr Stewart says he has written to the UN Human Rights Council in Geneva, alleging violations of his rights by the Kingdom of Bahrain.
TIBC defaulted on debts in May last year, while Mr Stewart was still head of the bank, triggering financial crises at two Saudi enterprises, Ahmad Hamad Al Gosaibi and Brothers, and the Saad Group. Those crises have since led to accusations of multibillion-dollar fraud and to legal actions in the US, Europe and the Gulf.
Mr Stewart told The National that the powers of attorney had been renewed by the late al Gosaibi family head, Suleiman, with the knowledge of the present leaders of the family, including Saud al Gosaibi, the managing director of the main business.
“The truth is that when times were good, they were happy to let Maan run the show,” Mr Stewart said. “In 2008, I attended corporate events where Maan and Saud were together greeting bankers. It was obvious the al Gosaibi family knew exactly what was going on in the Bahrain business.”
A spokesman for the al Gosaibis said: “Mr Stewart has no basis to assert that the al Gosaibis knew what he was up to in Bahrain. Although Mr Stewart and Mr al Sanea claim that al Gosaibis were members of TIBC’s board of directors, that claim is patently false.”
Click here for the full article in The National.
Euromoney Magazine Receives Malicious Emails
The Euromoney website has published a short but intriguing story about a series of emails it has received relating to the dispute.
It reports that the addresses from which the emails are sent - as well as their content - are "clearly devised to suggest that the Algosaibis' allegations might not be unfounded: something with which Al Sanea's lawyers might disagree."
Euromoney reports that it received these emails from a variety of similar addresses: mideast.fraud.watch@gmail.com, middle.east.fraud.watch@gmail.com and fraud.watch.mideast@gmail.com. It also says that it "suspects that the emails might have been sent to other members of the media and financial community too."
Though Euromoney is careful to avoid suggesting who has been sending these emails, as it points out "all it suggests is that the senders of the emails might hold a slight [our italics] degree of malice towards Al Sanea."
Read the Euromoney story here: http://www.euromoney.com/Article/2586060/Saudi-Arabia-Encouraging-balanced-reporting.html?Type=Article&ArticleID=2586060
It reports that the addresses from which the emails are sent - as well as their content - are "clearly devised to suggest that the Algosaibis' allegations might not be unfounded: something with which Al Sanea's lawyers might disagree."
Euromoney reports that it received these emails from a variety of similar addresses: mideast.fraud.watch@gmail.com, middle.east.fraud.watch@gmail.com and fraud.watch.mideast@gmail.com. It also says that it "suspects that the emails might have been sent to other members of the media and financial community too."
Though Euromoney is careful to avoid suggesting who has been sending these emails, as it points out "all it suggests is that the senders of the emails might hold a slight [our italics] degree of malice towards Al Sanea."
Read the Euromoney story here: http://www.euromoney.com/Article/2586060/Saudi-Arabia-Encouraging-balanced-reporting.html?Type=Article&ArticleID=2586060
Monday, June 7, 2010
Awal Bankers sue UK Firm HIBIS, alleging libel
Andrew England of The Financial Times Newspaper (England) has reported another twist to the already complicated situation in Bahrain: He reports that the three Awal bankers who are currently detained in that country (see our post of May 6) have launched a lawsuit in the UK's High Court against a company called HIBIS.
Mr England reports that the Awal bankers' lawsuit accuses HIBIS of libellously and wrongfully alleging that they were part of a huge $2bn "scam" that caused Awal to collapse. Court documents apparently state that HIBIS wrongly alleged that the Awal trio had "systematically perpetrated a criminal fraud on a giant scale".
The three bankers reportedly allege that HIBIS is guilty of defamation. They also assert that the HIBIS report - commissioned by the Bahraini authorities, it would seem - was "distributed by Hibis to a law firm and an accounting firm in London". That this accusation has been made in court documents seems to suggest - although this can only be speculation at this stage - that the bankers believe that some sort of confidentiality has also been breached.
The Financial Times reports that - although it declined to comment - HIBIS has confirmed that it will be fighting the case. Interestingly, a UK libel lawyer has said that both parties will be fighting a "test-case". The Central Bank of Bahrain has also declined to comment.
Little is known about HIBIS, beyond the fact that they operate in the field of fraud detection and prevention. Internet research does not yield much information about exactly who HIBIS is. The Group apparently consists of two independent companies, one in the UK and the other in Australia. Its UK website is currently under redevelopment, but it does list two Directors (see http://www.hibis.net).
It is not clear how HIBIS - which it seems is a relatively small company - became involved in events in Bahrain, though one must assume that the company was commissioned by the Bahraini authorities. It is not known whether or not HIBIS remains employed as part of Bahrain's investigation into Awal's default.
Taif Info Center will report more information about the case and HIBIS as it emerges. For now, as the Financial Times makes clear, the HIBIS Report to the Bahraini authrorities and the resulting UK libel case, may have big ramifications: potentially for HIBIS, or for the Awal Bankers and - perhaps - even for the Bahraini authorities, not not least because of the lawsuit launched by Glenn Stewart in Geneva (see our previous post).
This is, yet again, one to watch carefully.
Read the original Financial Times story here: http://www.ft.com/cms/s/0/724daec4-6dab-11df-b5c9-00144feabdc0.html
Mr England reports that the Awal bankers' lawsuit accuses HIBIS of libellously and wrongfully alleging that they were part of a huge $2bn "scam" that caused Awal to collapse. Court documents apparently state that HIBIS wrongly alleged that the Awal trio had "systematically perpetrated a criminal fraud on a giant scale".
The three bankers reportedly allege that HIBIS is guilty of defamation. They also assert that the HIBIS report - commissioned by the Bahraini authorities, it would seem - was "distributed by Hibis to a law firm and an accounting firm in London". That this accusation has been made in court documents seems to suggest - although this can only be speculation at this stage - that the bankers believe that some sort of confidentiality has also been breached.
The Financial Times reports that - although it declined to comment - HIBIS has confirmed that it will be fighting the case. Interestingly, a UK libel lawyer has said that both parties will be fighting a "test-case". The Central Bank of Bahrain has also declined to comment.
Little is known about HIBIS, beyond the fact that they operate in the field of fraud detection and prevention. Internet research does not yield much information about exactly who HIBIS is. The Group apparently consists of two independent companies, one in the UK and the other in Australia. Its UK website is currently under redevelopment, but it does list two Directors (see http://www.hibis.net).
It is not clear how HIBIS - which it seems is a relatively small company - became involved in events in Bahrain, though one must assume that the company was commissioned by the Bahraini authorities. It is not known whether or not HIBIS remains employed as part of Bahrain's investigation into Awal's default.
Taif Info Center will report more information about the case and HIBIS as it emerges. For now, as the Financial Times makes clear, the HIBIS Report to the Bahraini authrorities and the resulting UK libel case, may have big ramifications: potentially for HIBIS, or for the Awal Bankers and - perhaps - even for the Bahraini authorities, not not least because of the lawsuit launched by Glenn Stewart in Geneva (see our previous post).
This is, yet again, one to watch carefully.
Read the original Financial Times story here: http://www.ft.com/cms/s/0/724daec4-6dab-11df-b5c9-00144feabdc0.html
Wednesday, June 2, 2010
Former Algosaibi Banker Flees Bahrain
An incredible story has been reported by England's Daily Telegraph newspaper. Mr Glenn Stewart is an American banker who was the Chief Executive of The International Banking Corporation (TIBC), the Algosaibi's company which is at the centre of the dispute between them and Maan Al-Sanea.
According to the newspaper, Mr Stewart had been the subject of a travel ban imposed by the Bahraini Government, in much the same way as the three Awal bankers that we reported last week. Incredibly, Mr Stewart appears to have fled the country in "mysterious circumstances".
Even more incredibly, Mr Stewart has no lodged a claim in International Court of Human Rights (ICHR) in Geneva in which he is suing three members of the Bahrain authorities who, he argues, falsely imprisoned him to "deliberately inflict mental cruelty and torture".
The Daily Telegraph goes on to report that "lawyers acting for Mr Stewart have already written to several of the organisations charged with investigating TIBC's finances, including investigations company Kroll and accountancy firm Ernst & Young. In the letters seen by The Sunday Telegraph, Mr Stewart's legal representatives have asked the companies to clarify who exactly they are working for and what the nature of their inquiries were."
As the USA does not have an extradition treaty with Bahrain, Mr Stewart will be safe from any legal action. But his story raises some intriguing questions:
- What will the Algosaibis make of the fact that one of their former employees has decided to cut and run in such a fashion?
- Does Mr Stewart's escape mean that he had no confidence in the process of the Bahraini investigation, or did he - perhaps - think that were that investigation to conclude it would not be in TIBC's favour?
- The story will also throw further light on the use of travel bans without formal charges being brought. In particular, what will this event mean for the bankers, both of Awal and TIBC, who remain under travel bans?
For now these questions must remain unanswered, but one thing is certain - the whole story is beginning to unravel...
Read the original Daily Telegraph article here: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7783362/TIBC-banker-sues-Bahrain-after-being-held-for-10-months.html
According to the newspaper, Mr Stewart had been the subject of a travel ban imposed by the Bahraini Government, in much the same way as the three Awal bankers that we reported last week. Incredibly, Mr Stewart appears to have fled the country in "mysterious circumstances".
Even more incredibly, Mr Stewart has no lodged a claim in International Court of Human Rights (ICHR) in Geneva in which he is suing three members of the Bahrain authorities who, he argues, falsely imprisoned him to "deliberately inflict mental cruelty and torture".
The Daily Telegraph goes on to report that "lawyers acting for Mr Stewart have already written to several of the organisations charged with investigating TIBC's finances, including investigations company Kroll and accountancy firm Ernst & Young. In the letters seen by The Sunday Telegraph, Mr Stewart's legal representatives have asked the companies to clarify who exactly they are working for and what the nature of their inquiries were."
As the USA does not have an extradition treaty with Bahrain, Mr Stewart will be safe from any legal action. But his story raises some intriguing questions:
- What will the Algosaibis make of the fact that one of their former employees has decided to cut and run in such a fashion?
- Does Mr Stewart's escape mean that he had no confidence in the process of the Bahraini investigation, or did he - perhaps - think that were that investigation to conclude it would not be in TIBC's favour?
- The story will also throw further light on the use of travel bans without formal charges being brought. In particular, what will this event mean for the bankers, both of Awal and TIBC, who remain under travel bans?
For now these questions must remain unanswered, but one thing is certain - the whole story is beginning to unravel...
Read the original Daily Telegraph article here: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7783362/TIBC-banker-sues-Bahrain-after-being-held-for-10-months.html
Tuesday, May 11, 2010
US Banks in Spotlight
The National, Abu Dhabi, reports today that a senior US politician is calling for an immediate investigation into allegations of “massive global money laundering” by big US banks in their dealings with “persons from the Middle East”. Those persons being, of course, being AHAB and Maan Al-Sanea.
The paper reports that Peter King, who is a Republican Congressman, wrote to the US Attorney General calling for the "US government to investigate transactions involving billions of dollars that passed between the Gulf and New York banks." Mr King reported went on to cite allegations by AHAB that some $4.7bn of “suspicious transactions employed for the alleged fraud moved through one account at Bank of America in New York”.
Mr King goes on to warn that “If the allegations against Mr al Sanea prove correct, I fear that the systemic failure to detect such a significant money-laundering scheme from a high-risk region could serve as a presage for even more ominous events, perhaps even significant sources of terrorist financing.”
It will be interesting to see what happens next and what effect the Congressman's letter has, not just with the American authorities, but with those investigating the dispute in Saudi Arabia. This is an issue to which The National Alludes: "Mr King’s letter will also raise the stakes in Saudi Arabia, where the authorities have been conducting an internal investigation into how Al Gosaibi and Saad Group, Mr al Sanea’s holding company, came to owe $22bn to more than 100 Gulf and international banks."
Read the full article here: http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100510/BUSINESS/705109867/1005
Taif Information Center will endeavor to report back with more information about what prompted the Congressman's intervention, as well as any further details as to what effect it may have.
The paper reports that Peter King, who is a Republican Congressman, wrote to the US Attorney General calling for the "US government to investigate transactions involving billions of dollars that passed between the Gulf and New York banks." Mr King reported went on to cite allegations by AHAB that some $4.7bn of “suspicious transactions employed for the alleged fraud moved through one account at Bank of America in New York”.
Mr King goes on to warn that “If the allegations against Mr al Sanea prove correct, I fear that the systemic failure to detect such a significant money-laundering scheme from a high-risk region could serve as a presage for even more ominous events, perhaps even significant sources of terrorist financing.”
It will be interesting to see what happens next and what effect the Congressman's letter has, not just with the American authorities, but with those investigating the dispute in Saudi Arabia. This is an issue to which The National Alludes: "Mr King’s letter will also raise the stakes in Saudi Arabia, where the authorities have been conducting an internal investigation into how Al Gosaibi and Saad Group, Mr al Sanea’s holding company, came to owe $22bn to more than 100 Gulf and international banks."
Read the full article here: http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100510/BUSINESS/705109867/1005
Taif Information Center will endeavor to report back with more information about what prompted the Congressman's intervention, as well as any further details as to what effect it may have.
Thursday, May 6, 2010
British Bankers Trapped in Bahrain
The Times newspaper, England, reports today that three senior executives at Awal Bank - part of the Saad Group - have launched a £300,000 libel lawsuit in the High Court in London against a company called Hibis.
The three bankers - Alistair MacLeod, Anthony James and Cliff Giddings, all British - have been under investigation for nearly a year in relation to the collapse of Awal Bank. "They remain under criminal investigation by Bahrain’s Public Prosecutor as part of a wider inquiry into the collapse of Awal but have not been charged", reports The Times.
The article goes on to report that the three men claim that the basis of the investigation against them is a report commissioned by the Central Bank of Bahrain and written by this company called Hibis. It is in the report that accusations against the three men are said to have surfaced first and which is the subject of the libel lawsuit.
The newspaper also reports that the three men have been unable to leave Bahrain after having had to surrender their passports. They have written to the UK Government's Foreign Secretary to appraise him of the situation and to "complain that their health and that of their families has suffered as a result of their confinement. One says he has been unable to seek appropriate checks for a relapsed cancer."
Read the full article here: http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article7117342.ece
Taif Information Center will endeavor to find out more about this new development, so check back for updates.
The three bankers - Alistair MacLeod, Anthony James and Cliff Giddings, all British - have been under investigation for nearly a year in relation to the collapse of Awal Bank. "They remain under criminal investigation by Bahrain’s Public Prosecutor as part of a wider inquiry into the collapse of Awal but have not been charged", reports The Times.
The article goes on to report that the three men claim that the basis of the investigation against them is a report commissioned by the Central Bank of Bahrain and written by this company called Hibis. It is in the report that accusations against the three men are said to have surfaced first and which is the subject of the libel lawsuit.
The newspaper also reports that the three men have been unable to leave Bahrain after having had to surrender their passports. They have written to the UK Government's Foreign Secretary to appraise him of the situation and to "complain that their health and that of their families has suffered as a result of their confinement. One says he has been unable to seek appropriate checks for a relapsed cancer."
Read the full article here: http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article7117342.ece
Taif Information Center will endeavor to find out more about this new development, so check back for updates.
Tuesday, May 4, 2010
CATCH 22 IN THE GULF - MORE LAWSUITS POSSIBLE?
Asa Fitch of the National newspaper (Abu Dhabi) has written an illuminating article about the dispute, drawing interesting parallels with Dubai World.
As well as offering a neat summary of the history of the dispute, the article highlights how the region's banks have been affected by the Al-Gosaibi / Saad Group dispute and how they have changed the way they do business themselves: they have, for instance, begun to "re-evaluate the age-old practice of name lending".
Furthermore, as Asa Fitch writes, after the two companies started to miss payments to banks in the Gulf, the banks "made an additional $2.6bn of provisions [cash set aside as a cushion against bad loans] in the remainder of the year, a rise analysts say is attributable mainly to the Saudi defaults...The groups were estimated to owe UAE banks $3bn, suggesting that more than half of the provisioning by banks in the latter half of last year could have been linked to exposures to Saad and Al Gosaibi."
Mr Fitch goes on to argue that the "strains caused by the saga...have so far been much greater than difficulties stemming from the better-publicised Dubai World debt restructuring. The banks have yet to take any write-downs on Dubai World loans because the conglomerate is continuing to make scheduled interest payments as it works towards a debt deal."
In making that comparison, Mr Fitch has hinted at one of the greatest difficulties of this dispute, an issue both simple and serious, which has caused so many problems for the region's banks.
Banks have not had to take provisions with regards to Dubai World, because it is servicing its debts. They were forced to with regards Saad Group and AHAB because those two companies were (are) not. But this is the Catch 22. For the very nature of the dispute has prolonged the banks' exposure to the two Groups, worsened the situation and actively prevented either party servicing their debts.
Take, for example, the fact that AHAB sought and obtained a freezing order in the Cayman Islands for $9.2 billion of Maan Al-Sanea's assets. So, despite Mr Maan Al-Zayer's (see our previous post) repeated statement that all debt would be serviced, the company is unable to do so.
Or, on the other hand, consider the simple fact that AHAB's position is that their debts are the responsibility of Maan Al-Sanea and therefore the duty to service them is not theirs - a position that Maan Al-Sanea contests. Therefore, once again, as things stand the banks are left with little prospect of recovering what is owed to them (hence all the provisions) until the dispute is settled one way or the other.
How likely is that, however? As Mr Fitch points out, a panel was set up in Saudi Arabia to investigate the myriad allegations. We are approaching that panel's first birthday and, seemingly, it has found nothing of note. Nothing to report on yet, at any rate.
One has to wonder what the Gulf's banks think about the lack of movement, because with the situation seemingly at an impasse, with freezing orders in place, and with blame so vigorously disputed they face continued exposure to the loans they made. It will be interesting to see how long their patience lasts and whether more lawsuits - launched by them - could be on the way...
Read the full National article here: http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100502/BUSINESS/705029964&SearchID=73389661512208
And please post your thoughts on the complex situation below.
As well as offering a neat summary of the history of the dispute, the article highlights how the region's banks have been affected by the Al-Gosaibi / Saad Group dispute and how they have changed the way they do business themselves: they have, for instance, begun to "re-evaluate the age-old practice of name lending".
Furthermore, as Asa Fitch writes, after the two companies started to miss payments to banks in the Gulf, the banks "made an additional $2.6bn of provisions [cash set aside as a cushion against bad loans] in the remainder of the year, a rise analysts say is attributable mainly to the Saudi defaults...The groups were estimated to owe UAE banks $3bn, suggesting that more than half of the provisioning by banks in the latter half of last year could have been linked to exposures to Saad and Al Gosaibi."
Mr Fitch goes on to argue that the "strains caused by the saga...have so far been much greater than difficulties stemming from the better-publicised Dubai World debt restructuring. The banks have yet to take any write-downs on Dubai World loans because the conglomerate is continuing to make scheduled interest payments as it works towards a debt deal."
In making that comparison, Mr Fitch has hinted at one of the greatest difficulties of this dispute, an issue both simple and serious, which has caused so many problems for the region's banks.
Banks have not had to take provisions with regards to Dubai World, because it is servicing its debts. They were forced to with regards Saad Group and AHAB because those two companies were (are) not. But this is the Catch 22. For the very nature of the dispute has prolonged the banks' exposure to the two Groups, worsened the situation and actively prevented either party servicing their debts.
Take, for example, the fact that AHAB sought and obtained a freezing order in the Cayman Islands for $9.2 billion of Maan Al-Sanea's assets. So, despite Mr Maan Al-Zayer's (see our previous post) repeated statement that all debt would be serviced, the company is unable to do so.
Or, on the other hand, consider the simple fact that AHAB's position is that their debts are the responsibility of Maan Al-Sanea and therefore the duty to service them is not theirs - a position that Maan Al-Sanea contests. Therefore, once again, as things stand the banks are left with little prospect of recovering what is owed to them (hence all the provisions) until the dispute is settled one way or the other.
How likely is that, however? As Mr Fitch points out, a panel was set up in Saudi Arabia to investigate the myriad allegations. We are approaching that panel's first birthday and, seemingly, it has found nothing of note. Nothing to report on yet, at any rate.
One has to wonder what the Gulf's banks think about the lack of movement, because with the situation seemingly at an impasse, with freezing orders in place, and with blame so vigorously disputed they face continued exposure to the loans they made. It will be interesting to see how long their patience lasts and whether more lawsuits - launched by them - could be on the way...
Read the full National article here: http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100502/BUSINESS/705029964&SearchID=73389661512208
And please post your thoughts on the complex situation below.
Saturday, May 1, 2010
Cayman Islands Proceedings Continue
As Andrew England for London’s Financial Times newspaper reported a month ago (http://www.ft.com/cms/s/0/319f69e4-3877-11df-aabd-00144feabdc0.html), Maan Al-Sanea was found in contempt by a Cayman Islands court “for breaching a worldwide order freezing $9.2bn of his assets”.
A spokesperson for Mr Sanea's Saad Group said the company was pleased that the court "ruled in our favour on the major allegations and that any findings against us are of a narrow, technical, and novel nature".
The spokesperson added: "We will be appealing against those elements of the judgment, and it remains our resolute belief that Saudi Arabia is the correct place for this entire spurious dispute to be resolved."
Yet to be reported on, however, is the fact that – right now – the judgements are being debated in the Cayman Islands Grand Court. The court’s calendar – viewable here: http://www.caymanjudicial-legalinfo.ky/Courts/Cause-lists/20100426-Grand%20Court%20List.pdf - – suggests that, right now, the case is again being heard in court. Indeed, five days have been scheduled to argue the facts.
With both sides so resolute as to where blame lies, the events in the Cayman Islands might prove significant. What will both sets of lawyers argue? With whom will the Judge agree, especially given the recent contempt ruling? And what will the wider ramifications be? We will soon find out...
A spokesperson for Mr Sanea's Saad Group said the company was pleased that the court "ruled in our favour on the major allegations and that any findings against us are of a narrow, technical, and novel nature".
The spokesperson added: "We will be appealing against those elements of the judgment, and it remains our resolute belief that Saudi Arabia is the correct place for this entire spurious dispute to be resolved."
Yet to be reported on, however, is the fact that – right now – the judgements are being debated in the Cayman Islands Grand Court. The court’s calendar – viewable here: http://www.caymanjudicial-legalinfo.ky/Courts/Cause-lists/20100426-Grand%20Court%20List.pdf - – suggests that, right now, the case is again being heard in court. Indeed, five days have been scheduled to argue the facts.
With both sides so resolute as to where blame lies, the events in the Cayman Islands might prove significant. What will both sets of lawyers argue? With whom will the Judge agree, especially given the recent contempt ruling? And what will the wider ramifications be? We will soon find out...
Wednesday, April 28, 2010
Debt Agreement Delayed
Bloomberg (21 April) reports that Saad Group hasn’t yet reached an agreement with its creditors to restructure its loans. During a conference in Riyadh, the company's Chief Financial Officer – Maan Al-Zayer – stated again, however, the company's commitment to meeting its obligations:
“Banks will be able to get their money back in due course,” whether it’s “from Saad, Algosaibi or any other entity,” He said “no agreement” has been reached on the company’s debt restructuring.
Mr Jim Courtovich, the Al-Gosaibi's spokesperson, is reported to have said in response that “it is entirely appropriate for Maan al-Sanea or the Saad Group to repay the creditors all monies owed from this matter” and that they “look forward to seeing their proposals to solve this problem.”
With billions of dollars owed by both companies, the relevant banks and financial institutions must be following events ever more closely to see what happens. Saad has continually promised, from the early stages, that it will meets its obligations to its creditors in full, though Bloomberg suggests this has again been delayed.
For its part, according to Dow Jones in November last year, AHAB offered its creditors 8.6 cents on the dollar, an offer, Dow claims, that banks found “ridiculous”.
One further point of interest from Mr Al-Zayer's news conference: Bloomberg reports that he again reiterated the Saad Group's belief that Saudi courts, based on Shariah, were the most suitable arena to settle this dispute, rather than foreign jurisdictions.
Mr Al- Zayer is quoted as saying: For “a creditor who is looking to retrieve money from any other party, without naming names, there is a proper channel to go through,” he said. “The Saudi system is able to provide that.”
Read the full Bloomberg report here:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFZARcNGfduk
The Dow Jones report with regards AHAB's offer to banks can be read here:
http://www.zawya.com/printstory.cfm?storyid=ZW20091119000003&l=053104091119
“Banks will be able to get their money back in due course,” whether it’s “from Saad, Algosaibi or any other entity,” He said “no agreement” has been reached on the company’s debt restructuring.
Mr Jim Courtovich, the Al-Gosaibi's spokesperson, is reported to have said in response that “it is entirely appropriate for Maan al-Sanea or the Saad Group to repay the creditors all monies owed from this matter” and that they “look forward to seeing their proposals to solve this problem.”
With billions of dollars owed by both companies, the relevant banks and financial institutions must be following events ever more closely to see what happens. Saad has continually promised, from the early stages, that it will meets its obligations to its creditors in full, though Bloomberg suggests this has again been delayed.
For its part, according to Dow Jones in November last year, AHAB offered its creditors 8.6 cents on the dollar, an offer, Dow claims, that banks found “ridiculous”.
One further point of interest from Mr Al-Zayer's news conference: Bloomberg reports that he again reiterated the Saad Group's belief that Saudi courts, based on Shariah, were the most suitable arena to settle this dispute, rather than foreign jurisdictions.
Mr Al- Zayer is quoted as saying: For “a creditor who is looking to retrieve money from any other party, without naming names, there is a proper channel to go through,” he said. “The Saudi system is able to provide that.”
Read the full Bloomberg report here:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFZARcNGfduk
The Dow Jones report with regards AHAB's offer to banks can be read here:
http://www.zawya.com/printstory.cfm?storyid=ZW20091119000003&l=053104091119
Monday, April 19, 2010
US Judge is Wary of Saudi Case
The issues of jurisdiction with regards the dispute between Saud Al-Gosaibi and Maan Al-Sanea seems to be growing, with Judge Richard Lowe from the New York Supreme Court stating that he has questions as to if the case should be heard in his city.
As the National reported earlier this month, "A New York judge has repeated his concern that his court may not be the proper place for claims to be heard from a Saudi company alleging it was the victim of a US$10 billion (Dh36.72bn) fraud by the Saudi businessman Maan al Sanea."
A decision will be due soon. Watch this space...
For the full story see The National, story by Asa Fitch :
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100401/BUSINESS/704019833&SearchID=73387753934649
As the National reported earlier this month, "A New York judge has repeated his concern that his court may not be the proper place for claims to be heard from a Saudi company alleging it was the victim of a US$10 billion (Dh36.72bn) fraud by the Saudi businessman Maan al Sanea."
A decision will be due soon. Watch this space...
For the full story see The National, story by Asa Fitch :
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100401/BUSINESS/704019833&SearchID=73387753934649
Monday, March 29, 2010
Why was this blog started?
The international business world has become transfixed by a dispute between two of Saudi Arabia’s richest families: al-Sanea and al-Gosaibi. The sums of money involved amount to billions. Claims and counter claims in the media mean that this has quickly become not just a legal dispute, but a very public family feud.This blog, the Ta’if information center, has been started to provide factual information - and to collect news stories - about a dispute that has spilled over into acrimony and has threatened the reputation of family businesses within Saudi Arabia as a whole. The website will be regularly updated and interested parties are encouraged to email news and information.
HISTORY OF THE DISPUTE
The first indication that there might be financial problems in the offing was on May 12, 2009 when ratings agency, Standard & Poors, cut The International Banking Corporation (TIBC), a Bahrain-based bank owned by the Algosaibi group, to selective default. Also in May, the Kingdom of Saudi Arabia (KSA)’s central bank, the Saudi Arabian Monetary Agency, ordered a freeze on the accounts of al-Sanea and al-Gosaibi and ratings agencies downgraded and then withdrew ratings for AHAB and al Sanea’s Saad Group.
Saad Group stated that it was confronted by a “short-term liquidity squeeze” linked to the global credit crunch. The group said debt restructuring was under way. One of the factors contributing to the group’s cash flow problems was the “failure of companies owned by a prominent Saudi family business and the unexpected and unprecedented regional reaction to that failure.” The prominent Saudi family business referred to was AHAB, and the failing companies included The International Banking Co. (TIBC). According to the Saad group statement: “Although Mr. Al-Sanea was at one time named as a managing director of AHAB, he has not acted in such capacity for many years and is not involved in the operations of AHAB in any way.”
The start of legal proceedings occurred when one of the United Arab Emirates largest privately-owned banks, Dubai- based Mashreqbank, registering a lawsuit in New York July 2009 against the Al Gosaibi family conglomerate, AHAB, for $225m, it claimed was owed to the bank. Mashreq’s law suits named AHAB; TIBC, the Bahreini bank owned by AHAB; and 20 members of the Al Gosaibi family asserting that the partners “were in fact the guarantors of the debts and obligations” of the company, and thus should be held liable for the defaults.
After this dramatic event, AHAB in turn countersued Mashreq and started proceedings against Maan al Sanea, alleging he had been part of a $10bn fraud.
Legal action has since been initiated by various interested parties in London, the UAE, the Cayman Islands and the Kingdom of Saudi Arabia (KSA). Sources close to Al Sanea have rejected the authority of foreign jurisdictions over the dispute and state he wishes to settle the dispute in KSA.
Exacerbated by the previous collapse of Lehman Brothers and the consequent international banking crisis, a domino effect has occurred in the Middle East, Europe and the USA of banks initiating litigation to protect their exposure to AHAB and Saad debt and is ongoing.
Readers familiar with KSA will know of Ta’if: a pleasant town high in the hills, overlooking the hot dusty plain towards Jeddah, where it is possible to take a cool, dispassionate view of proceedings below. Ta’if is the seat of the KSA government during the hot summer months in the nation’s capital, Riyadh.
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