Maan al-Sanea, founder of Saudi Arabia’s Saad Group, won dismissal of a $9.2 billion asset freeze in the Cayman Islands after Ahmad Hamad Algosaibi & Brothers Co. admitted failing to disclose evidence.
Algosaibi agreed it “breached its duty of full and frank disclosure” when it won the asset freeze against al-Sanea in 2009, the Grand Court of the Cayman Islands ruled yesterday. Algosaibi applied last month to voluntarily dismiss the freeze after it found new evidence that should have been revealed earlier. Al-Sanea still faces a fraud lawsuit filed by Algosaibi in New York and probes in Bahrain and Switzerland.
“Since AHAB started its litigation scheme over two years ago, I have been resolute in my complete rejection of its desperate claims that I somehow defrauded the Algosaibis,” al- Sanea said today in a statement, using Algosaibi’s initials.
The asset freeze was part of a global legal dispute between the companies after they defaulted in 2009 on a total of about $15.7 billion in loans from more than 100 banks. Al-Sanea, one of Saudi Arabia’s richest men who married into the Algosaibi family before founding Saad Group, faces claims he forged signatures to take out as much as $10 billion in fake loans through Algosaibi’s Money Exchange unit, which he ran.
The dismissal of the asset freeze doesn’t prove al-Sanea’s innocence or reduce his legal troubles, said Eric Lewis, a legal coordinator for the Algosaibi family. Al-Sanea has refused to appear in court in the Cayman Islands, Lewis said.
Algosaibi “voluntarily withdrew the freezing order and did not seek a new one, despite all the essential allegations of fraud and forgery having been proven correct,” Lewis said. “Maan al-Sanea has spent two years in procedural maneuvers to avoid a court from considering his vast fraud.”
The discovery of the documents three months ago in Saudi Arabia forced Algosaibi to drop its defense in June in a $250 million U.K. case filed by HSBC Holdings Plc (HSBA) and four other banks. The company decided the judge would reject its argument that the losses were a result of fraud by al-Sanea.
Al-Sanea, who denies forging signatures, said the documents found by Algosaibi prove his claim the company was aware of the loans he took out. The Cayman Islands court ordered Algosaibi to pay al-Sanea’s legal fees and will hold hearings to determine whether damages should be awarded as a result of the “wrongful” freeze, al-Sanea said.
Algosaibi’s admission prompted HSBC and the other lenders in the U.K. case, including London-based British Arab Commercial Bank Ltd., to question how Algosaibi planned to pay them back. Algosaibi has said it can’t pay them back in full.
The London case includes HSBC’s $85 million claim, British Arab Commercial Bank’s $19 million claim, Arab Banking Corp.’s claims totaling $140 million and Credit Agricole SA (ACA)’s $6 million claim.
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