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Blown billions, Part I

Blown billions, Part I

Banks in the Gulf and beyond are reeling from Saudi Arabia’s Saad and al-Gosaibi scandal. We look at the web of relationships behind a dispute that will change the way business is done in the region, reports Trend magazine. Part I

October 14, 2009 4:44 by



Saudi billionaire accused of stealing billions – yes, billions. It makes a good story, to be sure. But can a single tale of alleged fraud rock the foundations of the region’s entire financial system? It can when the warring parties are Saad Group and Ahmad Hamad al-Gosaibi & Brothers (AHAB), two of Saudi Arabia’s largest family-owned conglomerates.

If proved true, the charges against Maan al-Sanea, the chairman and CEO of Saad Group, are likely to put an end to  at least one lavish lifestyle.

A former Kuwaiti fighter pilot and now a Saudi citizen, al-Sanea lived a king-sized life. According to one visitor, guests at his ranch and private beach were shown his pet lions, his dolphin enclosure, and a carpet he claimed once belonged to the shah of Iran.

Also known as a philanthropist and art collector, al-Sanea, who turns 54 this year, ranked 62 in Forbes’ world billionaires list for 2009 with a net worth of $7 billion. The asset value of his Saad Group empire – named after a son who died in a car crash – reached $30 billion last year. He also owns a small stake in HSBC.

The man now stands accused of using forged documents to loot AHAB, a sprawling conglomerate once led by his late father-in-law, Abdulaziz al-Gosaibi, of a staggering $10 billion. Here are a few ways to put that sum in perspective: the $11 billion fraud of Bernie Ebbers, the now jailed CEO of World-Com, was thought the biggest corporate scam in history until the arrival of Bernie Madoff, the New York financier whose estimated swindle, including fabricated gains, was over $50 billion.



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1 Comment

  1. FG on October 14, 2009 7:45 pm

    Interesting synopsis of a developing story. Note that Al Sanea (his mother is related to Kuwait’s ruling Al-Sabah clan) did not work for AHAB until he married Sana, at which time he was effectively given management control of the AHAB owned Money Exchange – akin to a dowry of sorts. Sana and her husband were considered heirs to the business model that her father had built . It was Ahmad, the oldest of the Al Gosaibi brothers, who built the trading operations and laid the industrial foundation, but Abdulaziz who used it as collateral to leverage the family into the billion dollar league.

    Cousins Yousef and Saud (Sana’s younger brother) are managing AHAB’s operations but it is likely that they may not be the market makers their respective fathers were. That Saud may have been jealous of his brother-in-law is possible, but outright incompetence in management – well the owners are to wholly be blamed for that.

     

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