By Tarek El-Tablawy
Cairo - It goes well beyond the average family squabble.
For months, two billionaire families in Saudi Arabia, linked by marriage, have been locked in a bitter legal battle centred on an estimated $22-billion debt implosion and allegations of billions of dollars in fraud.
Bank accounts have been frozen. International banks, facing billions in outstanding debt, have filed suit. Claims of scapegoating and family jealousies have splashed across Mideast newspapers.
The dispute between Maan al-Sanea and his Saad Group and Ahmad Hamad al-Gosaibi and Bros, or AHAB - two of Saudi Arabia's most prominent private conglomerates - threatens to cast a pall over Saudi Arabia's image at a time when the global meltdown and credit crisis already have squeezed the kingdom's companies.
Continues Below ↓
It also has raised new questions whether Saudi's financial and corporate systems - still dominated by family firms and personal relationships -are transparent enough to allow outside lenders to make sound decisions. That worry has the potential to impact investment in the kingdom long term.
"During the crisis, if anything at all, transparency has deteriorated, and that is one of the key cultural changes that has to take place, particularly among family owned companies - where the tendency to be opaque is far greater," said Philipp Lotter, the Dubai-based senior vice president of Moody's Investor's Service.
Added Rahul Shah, a Dubai-based analyst with Deutsche Bank: "The feeling at the moment is that without greater disclosure, it's difficult to commit capital."
The details of the case have trickled out slowly, mostly in court cases filed in the United States and London.
Little has come from either company or, for that matter, from authorities in Saudi Arabia.
Continues...
|
StumbleUpon
Reddit
Digg
Delicious
Newsvine
Facebook
muti
Twitter
