Dubai-based Mashreq bank confirmed on Tuesday it is suing Ahmad Hamad Algosaibi & Bros (AHAB), one of two Saudi conglomerates involved in a large financial dispute, over alleged irregularities.

The bank said "it is currently engaged in legal proceedings," adding it won't comment any further as "the matter is sub judice". A spokesman for Mashreq confirmed the statement is related to the financial trouble at Algosaibi and another Saudi family-owned firm, Saad Group.

Saad Group and Algosaibi are restructuring a huge debt pile to which regional and international banks are exposed. The trouble at the two conglomerates have brought the level of disclosure in the Gulf region into question.

Algosaibi last week sued Maan Al-Sanea, the billionaire head of the Saad Group, for fraud in a US court in a case involving allegations of $10 billion in loan irregularities.

The Algosaibi lawsuit said Mashreq sued it for $150 million that it does not owe. It said that if the conglomerate does owe the money then it is because Sanea created the liability through fraud.

"We have every confidence that the courts will find in our favour and look forward to the speedy resolution of this matter," John Iossifidis, Mashreq's head of international banking, said in a statement. - Reuters