Abu Dhabi bank tells London court Saudi company defaulted.
ADCB demands $32m payment from Saad
Abu Dhabi Commercial Bank (ADCB) claimed in a UK court yesterday that it was owed about US$32 million (Dh117.5m) by the Saad Group, a troubled Saudi conglomerate. ADCB told a judge in London that Saad Trading, Contracting and Financial Services, a division of the Saad Group, defaulted on a currency swap worth $32m last summer, according to a Bloomberg report.
The bank's lawyer said Saad's defence - that the bank did not alert it on time about the termination of the agreement - was a tactic "designed only to delay judgment day against it", Bloomberg reported. A representative for the Saad Group in London and ADCB representatives in Abu Dhabi could not be reached for comment. The case in London is one of many filed in jurisdictions around the world against the Saad Group and its owner, Maan al Sanea, over defaults on financial obligations. The Saad Group and a second Saudi conglomerate, Ahmad Hamad Al Gosaibi and Brothers, began to default on loans, bonds and derivatives last summer, sending shockwaves through the region's banking system. The conglomerates are estimated to owe more than $10 billion to regional banks, leading to massive write-downs and lower profits for lenders.
In addition to the cases in London, the Saad and Al Gosaibi groups are involved in litigation in New York, Bahrain, the Cayman Islands and the UAE. In one of the more prominent cases, Dubai's Mashreqbank sued the Al Gosaibi group last year in New York over failed currency swaps. Al Gosaibi countered the charges by claiming its defaults resulted from an alleged $10bn fraud perpetrated against it by Mr al Sanea. Mr al Sanea has denied those allegations. The case is ongoing and hearings are scheduled for this week.
Abu Dhabi Islamic Bank (ADIB) was also sued last year in New York by the Dutch lender Fortis Bank. Fortis, which merged this year with ABN Amro, argued that ADIB failed to honour its obligations in a trade finance deal worth $40m. ADIB said it was questioning the authenticity of documents in the transaction, which involved the Al Gosaibi group and Awal Bank, a Bahraini banking subsidiary of the Saad Group that has since been put under administration by Bahrain's central bank.