x Abu Dhabi, UAESaturday 22 July 2017

Day of joy for Saudi family tarnished by travel ban affecting absentees

Absent friends mar the occasion at a wedding involving the Saudi Al Gosaibi family in Istanbul.

There was a joyous gathering on the shores of the Bosphorus in Istanbul last weekend, but the event was marred by the absence of certain people who were certainly invited, but who were prevented from attending.

Mohammed Al Gosaibi, one of the younger generation of the Saudi business family laid low by the longest-running financial scandal in the kingdom's history, celebrated his marriage to his long-standing fiancée in a glittering occasion at the Ciragan Palace, a former Ottoman marvel now turned into a five-star Kempinski hotel. But there were at least 20 family members who could not be there to celebrate with the newlyweds.

Partners in the family's master company, Ahmed Hamad Al Gosaibi & Brothers (Ahab) are still banned from travelling outside the kingdom by the Saudi government, and no special arrangements were granted for this innocuous family gathering.

That is a shame for Mohammed and his Turkish bride Cisem, who would dearly have loved to have his parents as well as uncles and aunts there. As he is not a partner in the family firm, he is able to travel, indeed has been travelling extensively for negotiations with international creditors still owed billions of dollars from the virtual collapse of the business in 2009.

The saga is well known now, as it enters its fifth year. The collapse of two banks in Bahrain had serious knock-on effects for the Ahab business in Saudi, and led to accusations of theft, fraud and forgery against Maan Al Sanea, the Kuwaiti-born businessman who married into the Al Gosaibi family and became its standard-bearer in financial services.

Mr Al Sanea, of course, denies those accusations and has resisted them in courts around the world. He too is covered by a travel ban and a freeze on assets in Saudi, just like the Ahab partners.

You can see why the Saudi authorities imposed the bans. With serious allegations flying around the kingdom, they wanted to ensure that people who might be subject to legal proceedings were available should any actions take place there. To date, none have.

The freeze on assets was put in place to prevent the disposal of any assets that might lawfully be regarded as the property of creditors.

But now, with the scandal about to enter its fifth year, there are increasing signs that the bans and freezes are counterproductive; they have not helped the two sides reach a resolution with either Saudi or global creditors (although Mr Al Sanea reportedly clinched a deal with some Saudi banks quite early in the process.)

Mohammed Al Gosaibi has worked tirelessly on behalf of the family to try to reach a deal with the international banks, but to no avail. This is partly because of an inability to agree on the valuation of assets that might be used to settle with creditors, but also because of the travel bans.

How can the family be expected to negotiate properly with more than 90 global banks when the principals are not permitted to travel?

On Mr Al Sanea's side, there is also an understandable reluctance to engage properly with global creditors so long as he is effectively confined to Al Khobar in the Saudi eastern province.

So it is not just a bunch of wedding guests in Istanbul who are inconvenienced by the Saudi restrictions. Some of the biggest banks in the world are also out of sorts, to the tune of billions of dollars in unpaid loans.

Whatever the reasons for their imposition in the first place, sources close to the matter say the restrictions are no longer assisting the resolution process, and should be lifted.