Algosaibis drop defence against banks' claims
London, June 15, 2011
The Saudi Algosaibi family gave up their fight against claims from five banks linked to a high-profile $22 billion feud within their clan over the collapse of their financial empire.
The family's Ahmad Hamad Algosaibi & Brothers (AHAB) partnership said it was dropping its defence against claims worth some $250 million by banks such as British lender HSBC and French group Credit Agricole.
The case also involves Bahrain-based Arab Banking Corporation (ABC), London-based British Arab Commercial Bank (BACB) and ABC Islamic Bank.
'The Algosaibi family has taken the decision to no longer defend claims brought by five banks in the English commercial court,' the family said in a statement after a short hearing on what was the fourth day of the trial.
The collapse of two Bahraini banks in 2009 -- one owned by the Algosaibis and the other by Saudi businessman Maan al-Sanea -- has split the family and left some of the world's biggest banks nursing billions of dollars in losses.
The Algosaibis allege that Al-Sanea, who married into the family 30 years ago and was put in charge of the family's financial business, siphoned off billions of dollars in a massive Ponzi scheme to his own benefit.
Al-Sanea has always categorically denied these allegations, and declined to comment for this story.
But new evidence presented by the five banks suing the Algosaibi family company at the High Court in London in the past few days raised doubts about the family's claim that they did not know what Al-Sanea was doing, Reuters said.
The Algosaibis dropped their defence after it transpired in a hearing on Monday that they knew about some of the borrowing going on in their financial business, which the banks argued was different from what they had said initially, it said.
The retreat brings an end to a case that was scheduled to go on for weeks and which will be closely watched by creditors around the world, against whom the Algosaibi side has relied on the same arguments.
The family said it would continue its search for what it said were 'stolen assets', maintaining its position that there had been massive forgery and that Al-Sanea diverted billions to his companies, with no benefit for the Algosaibis.
'Our case is not against the banks, our case is against Maan,' Mohammed Algosaibi, who has been attending the court sessions on behalf of the family, told Reuters.
The Algosaibis are suing Al-Sanea in the Cayman Islands, where he based many of the companies, for fraud and misappropriating money. That case has so far been mired in discussions over jurisdiction. -Reuters