Sunday, 19 July 2009

Al Sanea/AHAB: A $10bn Saudi lawsuit

From Zawya 19 July 09
Saudi Arabia has been rocked by a lawsuit charging one of the country's wealthiest businessmen, Maan al-Sanea, with stealing 10 billion dollars from his wife's family over four years.
Newspapers on Saturday splashed reports that the prominent Algosaibi business group had filed a lawsuit in a New York court accusing billionaire Sanea of skimming transfers from a workers remittance unit over four years.
In the biggest scandal to erupt publicly in the Gulf in the wake of the global financial meltdown, Sanea was accused of using inflated spreads on short-term foreign exchange transactions from the unit to swindle Ahmed Hamad Algosaibi Brothers Co, or AHAB, according to documents filed in New York's state supreme court.
By constantly rolling over the transactions, Sanea was able to hide them and amass a fortune before the arrangement apparently collapsed earlier this year, according to the charges.
"AHAB presently estimates that al-Sanea misappropriated approximately 10 billion dollars as a result of his frauds," the group charged.
The charges broke open a dispute between the two groups and numerous regional and international banks that had simmered behind the scenes for two months.
Mashreq Bank, one of the United Arab Emirates' largest, is cited as a "relevant person" in the case.
The charges were filed on July 15 in a "third party complaint" against Sanea and his Bahrain-based Awal bank in response to Mashreq's suit early July against AHAB for 150 million dollars allegedly owed in a foreign exchange deal.
At the center of the scandal are AHAB and Sanea's Saad group, closely-linked diversified businesses based in the eastern Saudi industrial city of Al-Khobar.
Sanea, who is married to the daughter of one of AHAB's founders, was head of the AHAB unit from where the suspect deals originated, the Money Exchange, which normally processes foreign workers' remittances.
According to AHAB's suit, since 2005 Sanea arranged billions of dollars in foreign exchange deals carrying "extortionate rates" with other banks through the unit.
Mashreq, it said, was one of the main partners in the deals, which were hidden from AHAB's management.
"For four years, literally billions of dollars sluiced back and forth between Mashreq and AHAB, all highly unusual transactions on non-commercial terms," the allegations say.
"These transactions could not have served any legitimate commercial purpose."
Mashreq was not contactable on Saturday, which was a holiday in the United Arab Emirates.

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