AHAB and Maan al-Sanea
Clash of the Saudi titans
The contours of a Saudi financial scandal become clearer
AT THE weekend, many Saudis speed across the 28km causeway joining their country to the more relaxed kingdom of Bahrain to enjoy a drink, a film,
or a pair of beautiful legs, as one Bahraini delicately puts it.
Sometimes, in their eagerness, they crash over the rails.
The financial traffic between the two countries also produced a terrible wreck last year—one of the worst in the history of banking in the Gulf.
In May 2009 The International Banking Corporation, a Bahrain bank owned by a venerable Saudi merchant family, the Gosaibis, defaulted on its obligations.
The default was an early sign that its parent, the Ahmad Hamad Algosaibi & Brothers Group, was in financial trouble.
In the legal disputes that followed, AHAB alleged it was the victim of a spectacular $9 billion fraud, orchestrated by Maan Al-Sanea,
a Saudi billionaire married to the daughter of one of the group's founders.
Mr Sanea, they alleged, enjoyed complete control of their financial businesses, raising money in their name from as many as 118 banks.
He siphoned billions out of the group, they claim, to entities he controlled.
Mr Sanea denies any wrongdoing, and insists that although he used to be involved in the running of AHAB, he has not been for many years.
The court battles surrounding TIBC's collapse hinge on this row about the extent and nature of Mr Sanea's role—something that recent court filings and TIBC's former boss have shed some light on.
The subject is urgent, as AHAB's creditors are closing in.
On June 16th TIBC's administrators, Trowers & Hamlins, who are running the bankrupt firm on behalf of its creditors,
filed a $720m claim against AHAB in Saudi Arabia, the first of a series of proceedings that they hope will recover $3.2 billion from the group.
Others are pursuing the Gosaibis in Bahrain, London, New York and elsewhere.
Saudi Arabia's king has formed a 12-member committee to resolve the dispute, and Bahrain's public prosecutor is questioning executives from time to time.
One of them was Glenn Stewart, the chief executive of TIBC until its collapse.
Mr Stewart recently escaped from Bahrain to America, eluding a travel ban.
In a complaint to the United Nations Human Rights Council, Mr Stewart says that he was caught in the middle of a Clash of the Titans, between the Gosaibis and Mr Sanea.
As boss of TIBC, Mr Stewart says he took instructions from Mr Sanea because he believed that the Gosaibis had given Mr Sanea full power of attorney to act on their behalf.
Mr Sanea had indeed been given power of attorney to run one of AHAB's financial divisions, the Money Exchange, in 1983.
But that was revoked in the 1990s, he says, and a narrower authority to sign documents on a case-by-case basis lapsed in 2003.
In 2005 Mr Sanea resigned from the board of TIBC and other AHAB financial businesses, citing too many pressures on my time.
After TIBC's default, he issued a statement saying he was not involved in the operations of AHAB in any way,
although his spokesman now refuses to confirm or deny whether he had any continuing power of attorney related to AHAB.
He also claims the Saudi committee has found no evidence of wrongdoing.
The Gosaibis, in a lawsuit against Mr Sanea in the Cayman Islands, say he exercised complete managerial control of the business of Money Exchange, with the full trust and confidence of AHAB.
They allege that Mr Sanea abused their trust, concealing his borrowings from them and forging documents bearing the signature of Sulaiman al-Gosaibi, one of the founders of the group.
The Gosaibis point out that TIBC's financial statements were purportedly signed by Sulaiman shortly before his death in 2009,
when he was in a coma in Zurich.
A guarantee to a creditor was supposedly signed in 2000 by Sulaiman's brother, Abdulaziz, after a stroke left him unable to hold a pen.
They say that Audrey Giles, a forensic scientist in London, has cast doubt on hundreds of Sulaiman's signatures, finding that many were too perfect a match to one another to be true.
Three of the documents she examined were the subject of a hearing last month in Bahrain, where Bank Muscat International of Oman is demanding $25m from AHAB.
The tribunal ruled that they were not forged.
But the ruling does not necessarily contradict Ms Giles's findings, since it merely concluded that the three documents were not among those she found to be forged.
Mr Stewart's claims raise one further question about this murky affair.
Why did he consent to be the boss of a bank he did not run?
You are nothing more than a glorified servant, he admits.
Wasn't that a waste of his talents?
Mr Stewart, who studied Islamic history and Arabic at Oxford, says that after his long years in the Gulf he would find it hard to adjust to Western corporate culture.
He is fascinated by the turbulence and anarchy of the Arab world, he says,
although he is now bearing the consequences of that ill-discipline.
The scandal caused tempests in the newspaper.
I just want to sit down and relax.
She shows great eagerness for success.
The ship was wrecked on the rock.
We all listened to the venerable scholar with awe.