42 Cayman companies sued

Winding up petition filed against Saad Investments

A lawsuit was filed last Monday in Cayman’s Grand Court against 43 defendants, including 41 companies that have their registered office at Maples and Calder or Maples Corporate Services.

The suit furthered claims that Saudi billionaire Maan Al Sanea has misappropriated billions of dollars.

According to news reports, Cayman’s Grand Court has ordered US$9.2 billion of. Sanea’s worldwide assets frozen. This order apparently came as a result of an ex parte application brought by the Cayman office of the law firm Mourant de Fue & Jeune in the Chambers of Justice Alexander Henderson on 24 July.

The writ of summons was filed by Mourant on behalf of Ahmad Hamad Algosaibi and Brothers Company on Monday 27 July. The writ contains a general endorsement of the plaintiff’s claims rather than a specific statement of claim.

Mr. Sanea is listed as the second defendant in the action, after Saad Investments Company Limited. Listed as the fourth defendant is Barclays Private Bank and Trust (Cayman) Ltd., as trustee of the Saad Settlement. The other 40 companies listed as defendants in the company all have their registered office with Maples Corporate Services Limited, located at Ugland House on South Church Street.

Saad Investments Company Limited was also subject to a winding up petition filed by the law firm Walkers on Thursday 30 July on behalf of Barclays Bank PLC, CALYON and The Royal Bank of Scotland.

The winding up petition claims that Saad Investment Group Limited owes the three petitioners a combined total of more than US$6 billion in principal and interest for loans that became due in their entirety when the borrower defaulted due to non-payment.

In addition, the petition stated Saad Investment Group defaulted as a result of failing to respond to two reasonable requests for information made on 3 June and 12 June 2009 and by having its credit rating downgraded by Moody’s on 2 June.

The petition asks that Saad Investment Company Limited be wound up and that Hugh Dickson, Stephen John Akers and Mark Byers, all of Grant Thornton Specialist Services (Cayman) Limited all be appointed as joint official liquidators of the company.

The case is not listed to be heard this week in the Grand Court cause list issued on Friday, but it is unknown whether attorney’s for the petitioners will attempt to have a special hearing convened.

Although the order to freeze Mr. Sanea’s assets and the appointment of the receivers is not a public record, it is understood that Peter Anderson and Richard Douglas of the Cayman office of Rawlinson & Hunter have been appointed receivers. Contacted on Friday, Mr. Anderson did not deny the appointment, but directed all media correspondence on the matter to the company’s marketing and communications staff member, Nicole Coe. Ms. Coe said a draft statement had been prepared and was under review.

‘It is expected that the statement will be approved and disseminated early next week,’ she said.

The Saad group of companies came under pressure in May. It admitted it had been hurt by the liquidity squeeze after Moody’s downgraded its ratings on the group to Ba1, which is considered a junk rating.

According to news reports, the Saudi Arabian Monetary Agency then issued instructions telling Saudi banks to freeze Sanea’s personal assets.

The Cayman lawsuit filed by Ahmad Hamad Algosaibi and Brothers last week follows one filed in the New York State Supreme Court on 15 July. That lawsuit claims Sanea misappropriated about $10 billion out of the Algosaibi’s family’s accounts into his own accounts and also fraudulently arranged – as a former employee of Ahmad Hamad Algosaibi and Brothers – loans to the company, which he diverted for his own use.

The Saad Group issued a statement Thursday saying the claims made by Ahmad Hamad Algosaibi and Brothers were without foundation and that Sanea would challenge the Cayman court’s order to freeze his company’s worldwide assets.

The winding up petition claims that Saad Investment Group Limited owes the three petitioners a combined total of more than US$6 billion in principal and interest for loans that became due in their entirety when the borrower defaulted due to non-payment.

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