Saudi Arabia’s central bank ordered the country’s banks to freeze the accounts of Maan al-Sanea, the Saudi billionaire who owns a stake in HSBC Holdings PLC, people familiar with the instructions said.
The Saudi Arabian Monetary Agency (SAMA) sent circulars to the legal departments of Saudi-based banks on Thursday and Saturday telling the lenders to freeze the accounts, including credit cards, of al-Sanea, his wife and four family members, one person who had read the documents said. SAMA didn’t say why it took the action, said the person, who declined to be identified because the information is confidential.
Al-Sanea, who is chairman of the Khobar-based Saad Group, also manages The International Banking Corp BSC (TIBC), a unit of Ahmad Hamad Algosaibi & Brothers Co, an Algosaibi official who spoke on condition of anonymity said.
Algosaibi said last week that TIBC’s creditors weren’t paid “pending a debt restructuring exercise.”
The bank has US$2.2 billion of short and medium-term debt, said a May 16 report by Capital Intelligence, a credit analysis and ratings company.
“Saad has never commented on rumors or speculation about its business affairs,” Saad Group said in an e-mailed statement.
People in the Saudi banking industry said their employers had received instructions to freeze al-Sanea’s credit lines, though they hadn’t seen the documents.
Al-Sanea’s net worth is US$7 billion, ranking him as the world’s 62nd richest person, Forbes magazine reported March 11.
As of Dec. 30, al-Sanea indirectly held 359.1 million shares, or 2.97 percent, of London-based HSBC, Europe’s biggest bank, an HSBC filing showed. The stake is worth about £2 billion (US$3.28 billion).
Al-Sanea’s Saad Investment Co received a US$2.82 billion loan from a group of 26 European, US, Asian and Arab banks in September 2007 as the global credit crisis damped demand for debt. Earlier that year, Saad Trading Contracting & Financial Services Co, part of al-Sanea’s Saad Group of companies, said it would borrow US$5 billion as part of a 20-year plan to diversify investments inside and outside the kingdom.
Standard & Poor’s Ratings Services revised its outlook on Saad Group and related entities on May 22 to “negative” from “stable” because of its increased real-estate exposure resulting in less liquidity and a more limited geographic diversity of its holdings. S&P affirmed the company’s “BBB+/A-2” corporate credit ratings.
The Middle East Economic Digest reported on May 23 that Algosaibi had defaulted on US$1 billion in foreign exchange transactions, trade finance loans and swap agreements. The magazine cited unidentified bankers.
But Algosaibi said on Wednesday that it was “financially solid and capable of meeting obligations.”
The company is an investor in Saudi British Bank and Arab National Bank, its Web site says. The president of the family-owned holding company, Sulaiman Hamad Algosaibi, died earlier this year.
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