Four international banks ordered to give up data on al Sanea

A New York court has ordered four major banks to open their books to aid in the investigation of a Saudi businessman accused of running a trillion dollar Ponsi scheme.

HSBC is one of five banks that won an order against the Al Gosaibis to repay a total of US$250 million (Dh918.2m) in June. Reuters

A New York court has ordered four international banks to provide evidence in the investigation of a Saudi businessman accused of running a US$10 billion (Dh36.7bn) Ponzi scheme.

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Ahmad Hamad Al Gosaibi & Brothers, a prominent Saudi family business, is suing Maan al Sanea, a Saudi businessman, in a number of courts around the world, accusing him of using a money transfer business owned by Al Gosaibi to siphon funds into his own accounts.

Large money transfers through US banks were allegedly instrumental in sustaining the scheme.

Bank of America, Citibank, HSBC and Standard Chartered were ordered on Friday to provide documents to Al Gosaibi regarding the flow of money through their facilities.

Eric Lewis, Al Gosaibi's chief legal adviser and a partner at the international law firm Baach Robinson & Lewis, welcomed the ruling.

A spokesman based in London for Mr al Sanea declined to comment on the New York ruling on grounds that his client was not a party to it. Mr al Sanea has consistently denied any wrongdoing in the affair.

All four banks previously submitted objections to Al Gosaibi's request, arguing that the company might use the records to sue the banks for their role in the alleged money laundering scheme.

"Since the court is satisfied that the documents [Al Gosaibi] is seeking are relevant to the foreign proceedings and for use in the foreign proceedings, the fact that [Al Gosaibi] may also be able to use the discovery in future litigation against [the banks] is immaterial," said Jed Rakoff, the judge hearing the case in the federal court in New York.

The charges against Mr al Sanea stem from his role as the managing director of the Money Exchange, Al Gosaibi's remittance arm, and two Bahraini companies he allegedly controlled - The International Banking Corporation (TIBC) and Awal Bank, a subsidiary of the Saad Group, a Saudi company run by Mr al Sanea.

TIBC was ostensibly owned by Al Gosaibi but was allegedly controlled by Mr al Sanea without Al Gosaibi's knowledge.

It is alleged that through these companies, Mr al Sanea borrowed and then misappropriated about $9.2 billion.

Several banks have filed lawsuits in New York, London, the Cayman Islands, Bahrain and the UAE against Al Gosaibi and the Saad Group, hoping to recover money lent to the companies.

The UAE lenders Mashreq, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank and Emirates NBD are among creditors owed an estimated $20bn.

In October last year, Awal filed for Chapter 11 bankruptcy protection in the US, naming ADCB among its largest creditors.