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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

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October 14, 2009 4:44 by



Even in death, Abdulaziz al-Gosaibi plays an important role in this saga. It was al-Gosaibi who years earlier had noticed the business acumen and shrewd negotiating skills of one of his employees, Maan al-Sanea. In Khobar, al-Sanea’s home town, speculation abounds regarding the billionaire’s past. According to a veteran of the city’s car parts industry – AHAB was the main supplier of the oil giant Aramco in the 1950s and 1960s – al-Sanea sought asylum in Saudi Arabia after fleeing his native Kuwait in his own plane.

In any case, Abdulaziz was so impressed with the younger man that he put al-Sanea in charge of large portions of AHAB – and gave him his daughter’s hand in marriage. Abdulaziz even encouraged al-Sanea to start his own company, Saad Group.

Fast forward to 2009

On May 12,Standard and Poor’s lowered the credit rating of AHAB’s majority-owned Bahraini bank, TIBC, to “default.” Since then AHAB has been fighting off creditors (which include around 100 regional and international banks), as has Saad Group, even while the latter distances itself from the TIBC implosion. When asked for comment, AHAB refused to add to this routine, bland statement: “The al-Gosaibi family remains committed to working with all stakeholders, including creditors, regulators, and other parties to seek answers and a resolution to all issues involved in this situation.”

That reticent statement stands in stark contrast to the charges contained in the lawsuits that have ensued; there are three cases as of late August. One is in New York, another in London and a third is being pursued in the Cayman Islands.



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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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