|By TAP Staff|Ahmad Hamad Algosaibi & Brothers today offered to make an upfront payment equal to approximately 10 percent of creditors’ claims as part of a settlement proposal to a group of banks and other financial institutions. The claims asserted by banks, totaling billions of dollars, arise out of liabilities incurred through a massive fraud perpetrated by Maan Al Sanea when he was head of the Money Exchange division of AHAB. The fraud left AHAB facing around USD 6 billion in direct liabilities to banks and other financial institutions. These liabilities have spawned more than 70 lawsuits in at least 10 countries over the past five years.
“The proposal we outlined today is a serious and genuine offer to maximize the recoveries for AHAB’s creditors and end a five year battle and the resulting stalemate in which we find ourselves today,” said Simon Charlton, AHAB’s Acting CEO. “The only alternative to this process is long, costly, uncertain, and in no one’s best interest.”
Charlton suggested that the most likely alternative to a consensual settlement with AHAB would consist of banks competing with each other to obtain individual enforcement orders in Saudi Arabia – proceedings that will incur massive legal costs, years of litigation, and significant uncertainty. The process would be further complicated due to the Royal Order that prohibits any sale or transfer of AHAB assets for the protection of all creditors. AHAB’s proposal creates a framework for a settlement whereby AHAB and its creditors would jointly approach the Royal Court to receive equal treatment in compliance with Sharia law.
The meeting also featured AHAB CFO, Ben Jones, who presented a realistic picture of AHAB’s financial condition. He pointed out that the company has lost all of its businesses outside Saudi Arabia, has no access to credit markets, and faces wary counterparties that are uncertain of AHAB’s future. Jones explained that AHAB has taken serious steps to restructure its business, including hiring a team of professional senior executives, working to drastically reorganize the business and cut costs. He and Mr. Charlton emphasized the Algosaibi family’s strong desire for a global resolution after five years of expensive litigation and turmoil.