There has been a recent lull in hostilities in the war being fought out in Saudi Arabia between the Al Gosaibi business dynasty and its former partner Maan al Sanea, whose Saad Group is alleged to have defrauded Al Gosaibi of US$9.2 billion (Dh33.8bn). But the Ramadan-inspired cessation should not be mistaken for a truce, let alone an armistice, in the bitter struggle being waged both inside the kingdom and in the global financial theatre.
A quick review of the strategic situation: Al Gosaibi's business empire has been laid low by what the family claims is a systematic, decade-long campaign of fraud and thievery by the Kuwait-born businessman. Mr al Sanea denies those allegations vehemently, but, in a series of surgical strikes by lawyers in New York, London and the Cayman Islands, has seen the assets of his Saad group frozen across the world.
The struggle between these giants of the Saudi business scene is a straightforward bid by the Al Gosaibis to get their money back, but is also a battle for the hearts and minds of the kingdom's ruling elite, who will ultimately determine the fate of the warring parties. The Al Gosaibi family suffered a self-inflicted tactical defeat in a recent move, which highlighted the sensitive nature of the issue within Saudi Arabia. They had successfully applied for a summons against Mr al Sanea in the Grand Court of the Cayman Islands, but their adversary was refusing to recognise the writ by the simple tactic of ignoring it. A document box containing the summons had been left untouched outside his palatial home in Al Khobar for weeks.
Acting on legal advice from Cayman, Al Gosaibi decided the writ could be legally served via publication in the Saudi press, and so took out full-page ads in Al Watan, the country's leading daily. All very technical and formal, you might imagine, but not in the publicity-shy circles of the senior Saudi establishment. The family were accused of bringing public shame on themselves, Mr al Sanea and the kingdom's business culture by openly airing their grievances in such a way. Criticism of the Al Gosaibis was even said to have extended as far as the Saudi Arabian Monetary Agency (SAMA), which a few days later appeared to wash its hands of the affair in a strongly worded statement from its governor, Muhammad al Jasser.
The Al Gosaibis, frustrated by the Saudi legal process, may have been acting simply within their rights, but the move has rebounded on them. We will see the full extent of the damage when the Saudi financial authorities report to King Abdullah, expected imminently.
Meanwhile, on the second front in Bahrain, things have gone better for the family. It was there that battle was first joined back in May when two banks connected to Al Gosaibi and Saad - Awal and The International Banking Corporation (TIBC) - defaulted on their obligations. In two hitherto unpublished documents from Rashid Mohammad Almeraj, the governor of the Central Bank of Bahrain, Mr al Sanea, his right-hand man Maan Hani Alzayir and a host of banking executives are accused of fraud, betrayal of trust, embezzlement and money laundering in a series of foreign exchange transaction earlier this year. The reports conclude that Mr al Sanea "had direct contact with the institution [TIBC] for many years in the implementation of these transactions", which amounted to a "flagrant violation of all accepted banking practices" and which had "a negative impact on the reputation of the banking sector in Bahrain".
The reports, delivered to the Bahraini attorney general, Ali Ben Fadel Albou Aynayn, represent the first time allegations of criminality have been made by an official body investigating the Al Gosaibi-Saad affair, and could be a prelude to a full prosecution by the Bahraini AG. Although in some respects Bahrain is a sideshow to the main theatre of the campaign in Saudi Arabia, such a move by the Central Bank there would be viewed seriously by the SAMA and the kingdom's political establishment.
The Saudi corporate war is being closely watched by the 170 or so banks that have an interest in the outcome in the shape of an estimated $22 billion of loans to the Al Gosaibi and Saad empires. Attention in the coming weeks will focus on the Cayman Islands, where, following the appointment of liquidators Grant Thornton to the Saad businesses registered there, the search for assets is centred.
The Al Gosaibis - and the banks - hope that when the liquidators get full access to the Saad entities, they will find sufficient assets to cover the debts they are owed. But they may be disappointed. A friend of Mr al Sanea in London says: "He was highly leveraged and most of the assets, like his stake in [British house-builder] Berkeley Group, were dumped earlier this year." The status of Saad's multibillion stake in the global banking group HSBC, bought in 2007 when Mr al Sanea was riding the crest of the pre-crisis financial wave, is still a mystery. He has sold down some of the holding, it is said, but the remainder - amounting to more than 1 per cent of HSBC and worth something in the region of $2bn - could turn out to be the only significant remaining asset in Saad's once-mighty empire.
fkane@thenational.ae