News Column

Crunch talks to resolve financial row

May 7, 2014

MEETINGS intended to resolve a multi-billion dollar financial dispute that followed the collapse of two Bahraini banks are due to take place in Dubai today.

Bahrain-based Awal Bank and The International Banking Corporation (TIBC) have been in administration since mid-2009, sparking an international scramble by financial institutions to recover an estimated $22 billion from them and other entities.

Saudi-based Ahmad Hamad Al Gosaibi and Brothers (AHAB), which is being held accountable for $9.2bn of the debt, has called a meeting with creditors today to come up with a final settlement.

Around 65 banks have reportedly filed lawsuits against AHAB in 10 countries in an attempt to recover their money, including seven banks in Bahrain owed between $300 million and $400m.

However, AHAB claims it is the victim of an elaborate fraud and 13 former bank officials are currently standing trial in Bahrain's High Criminal Court on charges of corruption.

AHAB claims its debt was run up against its knowledge by TIBC, AHAB's Money Exchange and other businesses in Bahrain including Algosaibi Trading Services and Algosaibi Investment Holdings.


It has pointed the finger at Saudi citizen and Saad Group founder Maan Al Sanea, who married into the Algosaibi family and is among those facing criminal charges in Bahrain.

He has denied wrongdoing, but AHAB last month won two rulings in the Cayman Islands against 10 of his companies that it claims received billions of dollars from the alleged fraud.

One of the rulings rejected an appeal by nine of the companies, which are currently in administration, to strike out a "large portion" of AHAB's claim against them - meaning they now face legal action, AHAB said in a statement.

The second ruling overturned an earlier decision to dismiss the case against another of Mr Al Sanea's companies.

AHAB has already obtained a $2.5bn interim award against Mr Al Sanea in the Cayman Islands and said the new verdicts "should be positive news" for banks with claims against AHAB.

The proposed settlement to be outlined today will be based on AHAB's existing assets, estimated to be worth between $1.1bn and $1.4bn, and any funds recovered in future from Mr Al Sanea and his companies.

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Source: Gulf Daily News (Bahrain)

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