DUBAI - Al-Gosaibi has accused Maan al-Sanea, the billionaire head of the Saad Group, of running a $10 billion “Ponzi scheme” as the feud between the two conglomerates at the heart of huge Saudi loan defaults worsens, UAE daily the National on Monday.
Ahmad Hamad Al-Gosaibi Group & Brothers (AHAB) alleged that Sanea “operated one of the largest Ponzi schemes in history”, the newspaper reported, citing papers filed in a New York court.
The Gosaibi group had sued Sanea in July over allegations of $10 billion in loan irregularities.
The case came after an earlier complaint filed against AHAB by Dubai-based Mashreq bank over irregular foreign exchange dealings.
The Gosaibi lawsuit claimed that Mashreq sued it for $150 million that it does not owe.
Gosaibi said Sanea “fraudulently arranged for the borrowing of billions of dollars from dozens of banks, steadily increasing the loan levels year-by-year”, the National reported, quoting from the court documents.
Mashreq has rejected claims by the group that it was aware of the fraud and aided and abetted Sanea’s conduct, the according to the newspaper report.
Several foreign and Saudi banks are exposed to billions of dollars of loan defaults by the two family-owned groups.