Court freezes Al Gosaibi assets

Ruling in UK on behalf of HSBC may not hold up in Saudi Arabia.

HSBC has won a court order freezing the British and some foreign assets of the ailing Al Gosaibi business empire in Saudi Arabia.

The assets consist mainly of property in London and shares in companies in the Virgin Islands, Channel Islands and Liberia.

HSBC is one of five banks that won a court case in London last month against Ahmad Hamad Algosaibi and Brothers, requiring it to repay some US$250 million (Dh918m) owed to banks.

Al Gosaibi lawyers told the London court it was unlikely the family would be able to repay the debt.

The new order, granted in the London High Court by Justice Julian Flaux last Thursday, names 20 members of the partnership and tells them they "must not in any way dispose of, deal with or diminish the value of any of their assets" as listed in the order.

Anyone disobeying the order "may be held in contempt of court, and may be imprisoned, fined or have … assets seized", the order adds.

The order will be lifted if the parties named pay a cash surety of about $95m to the court or agree some other security with the bank.

The document names five properties in the Mayfair area of London's West End.

It also identifies four private companies in which Al Gosaibi family members have shares: Foulkes Investments and Perowne International of the British Virgin Islands; Celendine, a company registered in the Channel Islands; and Allvest Properties, registered in Liberia.

The move is another squeeze on the family's assets outside Saudi Arabia. Recently, legal and accounting advisers to the family secured "charges" against the London properties, meaning they could not be sold without the advisers' permission.

The Al Gosaibis have for the past two years been involved in a bitter legal dispute with Maan Al Sanea, a Kuwaiti-born entrepreneur who married into the family.

The Al Gosaibis allege that Mr Al Sanea stole billions of dollars from them, a charge he has consistently denied. The Al Gosaibi and Al Sanea businesses owe as much as $20 billion to more than 100 banks.

The Al Gosaibi family is in the process of preparing a schedule of its assets for the London court, to be used as the basis for a possible negotiated settlement with creditors. Most of their assets, perhaps as much as 85 per cent, according to insiders, are in Saudi Arabia.

Al Gosaibi lawyers have told the London court that its order for the repayment of $250m is not enforceable in the kingdom.