Documents filed in the New York Supreme Court claim Maan al Sanea, the head of the Saad Group of Saudi Arabia, was involved in multibillion-dollar frauds involving hundreds of foreign exchange transactions with US banks. The allegations, which Mr al Sanea strongly denies, are contained in papers filed by lawyers working for Ahmad Hamad Al Gosaibi and Brothers, the Saudi family conglomerate fighting a long-running battle with Mr al Sanea.
The family has alleged that he defrauded them of about US$10 billion (Dh36.73bn) through theft and forgery over many years. The latest legal move, which came late on Friday night, is part of the Al Gosaibi strategy to have the case heard in New York and not in Saudi Arabia. Mr al Sanea has argued that Saudi is the appropriate location for it to be decided. The case also involves Mashreqbank of the UAE, which initially brought legal proceedings in the US to seek $150 million it claims it is owed by Al Gosaibi.
According to a spokeswoman for Mashreq: "This fraud debate lies outside Mashreq's area of concern and is an issue about which it has no knowledge." The court filings allege: "The transactions at issue in this case are $5bn in foreign-exchange transactions where US dollars were purchased in New York county. "The final transaction - a transaction denominated as a $150m currency swap - could not be completed because al Sanea converted these funds in New York by directing that they be removed from an account at Bank of America in New York, nominally belonging to [Al Gosaibi], to an account at HSBC in New York over which al Sanea held complete control."
The papers continue: "Not only did the overall fraud critically depend on hundreds of foreign-exchange transactions in New York but the theft of funds that are the subject of Mashreq's first party complaint also took place in New York." Arguing that New York is the appropriate place for the legal action to be heard, the Al Gosaibi lawyers claim: "The scheme by which Maan al Sanea usurped the name and credit of the al Gosaibi family was complex and multi-faceted.
"While al Sanea's scheme began in Saudi Arabia, its reach became global. Al Sanea used [Al Gosaibi's] good name and credit to borrow money not for [Al Gosaibi's] benefit, but to finance his own separate business empire." A London source close to Mr al Sanea declined to comment on the latest legal moves. A formal response from Mr al Sanea to the New York Supreme Court is expected next month. Attached to the filing is a report from the fraud investigation company Hibis to the Central Bank of Bahrain and the country's public prosecutor. Mr al Sanea's bank, Awal, which sparked the controversy when it defaulted on debts last May, is based in Bahrain.
Hibis claims: "All the evidence that we have gathered indicates that the chairman of Awal Bank, Maan al Sanea, is the central figure to this conspiracy and the main beneficiary of these frauds. "Al Sanea's management style has allowed him to control all of the transactions at the bank and use the senior management of the bank to assist him in these frauds." Also attached to the New York filings is a report from the accounting firm Ernst & Young to the Central Bank of Bahrain into foreign transactions at The International Banking Corporation, the Bahraini bank owned by the al Gosaibis, which they claim fell under the control of Mr al Sanea.
There is also what is alleged to be evidence of a forgery submitted to the Bahraini public prosecutor. The Al Gosaibi documents further allege: "The currency exchange transactions with Mashreq in issue were an important part of the overall scheme. Using his hirelings within the Money Exchange [a Saudi-Bahraini money transfer company] and other entities that he controlled, al Sanea directed and supervised close to $5bn in Mashreq transactions. Each transaction involved the purchase of US dollars in New York."