GFH chairman 'faces $125m lawsuit '
Manama, February 9, 2010
The chairman of Gulf Finance House, which is in talks to defer a debt payment, faces a $125 million lawsuit from a former business partner over a Qatar property project, the partner's lawyer said on Tuesday.
The lawsuit against GFH chairman Esam Janahi had been previously rejected by Bahrain's court of first instance and court of appeal, lawyer Waleed Hashim told Reuters.
But the kingdom's highest court, the court of cassation, took on the case, which relates to a partnership between Janahi and business partner, Khalid bin Ahmed Al-Suwaidi.
"The court of cassation yesterday accepted the case and referred it to the court of appeal," said Hashim.
He said the two had agreed to partner in GFH's Qatar Energy City real estate project.
In a written statement to Reuters, Janahi's legal advisor noted the motion had been turned away previously but did not provide more details.
"We would like to state that we have complete confidence in the Kingdom of Bahrain's efficient and fair legal system which has given us favorable rulings in the court of first instance and the court of appeal," the legal advisor wrote.
"Whilst we disagree with the prosecution, this is a matter to be decided in the courts."
GFH has been hit hard by a property market crash in the Gulf region and said on Feb 2 it would ask lenders of a $300 million murabaha loan due on Wednesday to defer payment of one third by six months.
Janahi is the founder of GFH and is viewed as key to managing the firm while his regional business relations are what have largely won business for GFH.
Most investment houses in Bahrain relied on booking upfront fees on money raised from investors for real estate projects and private equity projects, a market which collapsed following the end to a regional property boom late in 2008.
During the boom years, GFH launched a series of real estate projects it labelled "energy city", including in Libya and Kazakhstan.-Reuters