Saudi financier to challenge $9bn Cayman asset freeze

Maan al Sanea, the Saudi financier at the centre of a fraud investigation, will challenge a Cayman Islands court order that froze his assets.

Maan al Sanea, the Saudi financier at the centre of a fraud investigation, will challenge a Cayman Islands court order that froze US$9.2 billion (Dh33.79bn) of his assets. Last week's decision by the court to freeze Mr al Sanea's worldwide assets was in response to complaints filed by Ahmad Hamad Al Gosaibi and Brothers, which is suing Mr al Sanea in a New York court for $10bn, alleging he "falsified documents" to obtain the money for personal use when he was a senior executive at Al Gosaibi's financial division.

"Saad (the Saudi conglomerate founded and chaired by Mr al Sanea) will respond fully to all of these claims through the proper judicial process and definitively demonstrate their lack of any foundation," said a spokesman for the billionaire, according to Bloomberg. "The claims have been made before a full investigation has taken place and rely on partial and incomplete information." The court proceedings in the Cayman Islands are being closely watched by banks in the Gulf, which are owed as much as $20bn by the Saad Group and Al Gosaibi.

An Abu Dhabi banker said the ruling applied to personal assets, which could be used to pay off debts in fraud cases. HSBC recently estimated that debts to Saudi banks amounted to $7bn. Exposure in the UAE is much smaller and spread across several banks including Abu Dhabi Commercial Bank, Mashreqbank, First Gulf Bank, Union National Bank, Dubai Bank, National Bank of Abu Dhabi and Abu Dhabi Islamic Bank.

UAE banks have set aside billions of dirhams this year to cover an expected increase in loan defaults, including potential losses from loans to the two Saudi conglomerates. The Central Bank instructed banks to book provisions for up to 75 per cent of the value of the loans they had made to the Saad and Al Gosaibi groups, according to a Reuters report. The court in the Cayman Islands issued the order "at a hearing without notice to the defendants", according to the court documents. Mr al Sanea and the other defendants must inform Al Gosaibi of any assets in excess of $10,000.

Mr al Sanea was allowed up to $10,000 a week in living expenses by the court, while the 43 defendants in the case were permitted "reasonable" spending as they seek legal counsel, the document says. Mr al Sanea had his accounts frozen by the Saudi Arabian Monetary Agency on May 28. The Saudi central bank did not give a reason for the action. [e-mail]