Saudi families battle over $20 billion ‘fraud’

LAHORE: The Algosaibis, one of Saudi Arabia’s most powerful families, have accused Maan Al Sanea, the boss of the Saad Group, of embezzling $9.2 billion from them, in a case that could have repercussions for the Saad global empire of property and finance, the Telegraph reported on Sunday.The Algosaibis, currently being sued in New York by the Dubai-based Mashreq Bank for the alleged non-payment of $150 million, have claimed in their defence claims the missing money was borrowed by Al Sanea without their knowledge. They have alleged that it is merely one example of how Al Sanea borrowed money using their name without their knowledge or permission. Not true: Al Sanea, who is married to an Algosaibi, denies all the allegations. He claims he is being used as a scapegoat for a wider financial malaise in Ahmed Hamad Algosaibi and Brothers Company (AHAB). Forensic accountants estimate that Al Sanea has at least another $10 billion of loans with international banks, including Barclays, JP Morgan, Deutsche Bank and Commerzbank, which he used to buy both business and personal assets. On Tuesday, the Supreme Court of New York will hear arguments from both sides over the $150 million default that led to the discovery of the alleged fraud. Court documents, seen by The Sunday Telegraph, show that AHAB has named Al Sanea as a “third party plaintiff”, arguing that it “was not aware of the transaction” until it received legal notice from Mashreq Bank. It has claimed that any liability to Mashreq Bank is Saad’s, not theirs. Mashreq Bank is expected to argue that its quarrel is with AHAB, not Al Sanea.This weekend, Saad told The Sunday Telegraph that Al Sanea has not had any involvement in Algosaibi business dealings since 2006, when he quit as head of their money exchange unit. The highly-contentious spat between the two power bases is said to have almost paralysed lending to the private sector. Together the conglomerates could owe a raft of Saudi and international banks as much as $20 billion, analysts estimate.

Source: The National