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Saad, Gosaibi groups impact on Gulf widens
Source: BI-ME and Reuters , Author: BI-ME staff
Posted: Sat June 13, 2009 8:42 pm

SAUDI ARABIA. The impact of troubled Saudi groups Saad and Al Gosaibi widened with the first bank detailing its exposure while Al Gosaibi said it had discovered evidence of "substantial financial irregularities."

Bank Muscat Oman's largest lender, said on Thursday its exposures to both Saudi groups total US$171.4 million through its Riyadh branch and said its Bahraini unit BMI Bank also has exposures of about US$44 million.

Little information has emerged since privately-owned Saad Group and Ahmad Hamad Al-Gosaibi & Brothers Company both said they were restructuring debt, with parts of Saad group being downgraded to junk status by Moody's.

Saad has sold off parts of its international investments, including a stake in UK construction company Berkeley Group. Its billionaire chairman Maan Al-Sanea, whose bank accounts have been frozen by the Saudi Monetary Agency (SAMA), owns a stake in HSBC.

Prominent victims of the global financial crisis in the region have been Kuwait's Investment Dar and Global Investmen House, but with little transparency and disclosures in the world's largest oil-exporting region, the scope of the crisis has surfaced slower than elsewhere.

In Saudi Arabia in particular, opaque family conglomerates that typically started as trading and construction companies and then branched out into other industries play an important role in the economy.

AHAB on Thursday said it had discovered evidence of substantial financial irregularities within its financial services arm.

Saad's house bank Awal Bank is also based in Bahrain, a banking centre closely integrated with Saudi Arabia, the Arab world's largest economy.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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