Societe Generale SA, France’s second-biggest bank, told a U.K. trial judge that a unit of Saudi Arabia’s Saad Group failed to repay a $50 million loan guaranteed by its billionaire founder Maan al-Sanea.
The unit, Saad Trading Contracting & Financial Services Co., defaulted on the loan arranged in 2009, four months before Saad Group said it would seek to restructure its debt, lawyers for Societe Generale said today at the High Court in London. The lawsuit, filed in August 2009, seeks repayment of the loan plus a commission and legal costs.
The trial comes as al-Sanea, deemed the world’s 62nd richest person by Forbes Magazine in 2009, faces separate fraud claims by another Saudi company, Ahmad Hamad Algosaibi & Brothers Co., which alleges al-Sanea used fake documents to take out billions of dollars in loans in Algosaibi’s name.
Units of Saad Group and Algosaibi, both based in the Saudi oil city of Al-Khobar, defaulted after borrowing about $15.7 billion from more than 80 banks. Al-Sanea married into the Algosaibi family before founding Saad Group, which has businesses ranging from construction to health care.
Algosaibi last month admitted liability in a $250 million lawsuit in London filed by HSBC Holdings Plc and four other banks that loaned it money before the default.
Tim Robertson, a U.K.-based spokesman for al-Sanea, declined to comment on the trial when reached today by phone. The company has consistently denied the allegations.