Saad Group, the company owned by the Saudi billionaire Maan al Sanea, Monday denied reports of a freeze on its assets in Kuwait.
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Saad Group, the company owned by the Saudi billionaire Maan al Sanea, Monday denied reports of a freeze on its assets in Kuwait and said its accounts in Saudi Arabia were "stable". Saudi Arabia's central bank last week ordered the group's accounts in the kingdom be frozen and a Kuwaiti newspaper on Sunday that the Central Bank of Kuwait had also imposed a halt on transactions with the Saad Group. "Saad confirms that all its company accounts in Saudi Arabia are stable. Moreover, reports emerging yesterday regarding a freeze of assets and accounts in Kuwait are untrue. The group believes that many of these rumours stem from the circumstances of a private family issue. Saad is working toward a resolution of this matter," the company said in a statement. The company said it was close to announcing its proposal for a co-ordinating bank and a "top four" accounting firm to represent the interests of counter-parties in its debt restructuring plan. The statement follows the appointment of the business law firm Lawrence Graham as legal adviser and BDO Corporate Finance as financial adviser. Bankers said Gulf markets might see spill-over effects among other family-owned companies in the region. "This serves as a reminder that the credit crunch continues to affect people and companies," said Mohieddine Kronfol, the managing director at Algebra Capital in Dubai. "This raises issues of investors' rights and how creditors are treated. Finally, it has large implications for family businesses in the region, as they will face higher costs of funding and increased demands for transparency." Mr Kronfol said the focus would also be on the Saudi Arabian Monetary Agency (SAMA). "Everybody will look at how the creditors will be dealt with and how quickly the regulator can deal with the restructuring, as well as the role regulators had, if any, in the crisis." The difficulties facing the Saad Group have prompted speculation over whether other family-run Gulf businesses may face closer scrutiny by lenders and ratings agencies. "I do not think it is far-fetched to expect some businesses finding it difficult to fund their capital requirements going forward," said Yazan Abdeen, a fund manager at ING Investment Management. Mr Abdeen said this would be particularly true for family-owned businesses with heavy exposure to property and companies that were little diversified. "The triangle of Saudi, Bahraini and Kuwaiti banks is definitely the most exposed, but the issue is whether there is also UAE banking exposure," Mr Abdeen said. The ratings agencies Moody's and Standard & Poor's withdrew their ratings of the company last week. Mr al Sanea established the Saad Group in the 1980s and became one of Saudi Arabia's most prominent businessmen. He is also a major shareholder in HSBC and Samba Financial Group. email@example.com