Saudi Billionaire With HSBC Stake Has Accounts Frozen

Saudi Billionaire With HSBC Stake Has Accounts Frozen

May 31 (Bloomberg) -- 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 sent circulars to the legal departments of Saudi-based banks on May 28 and May 30 telling the lenders to freeze the accounts, including credit cards, of al-Sanea, his wife and four family members, according to one person who read the documents. SAMA didn’t say why it took the action, according to 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. B.S.C., a unit of Ahmad Hamad Algosaibi & Brothers Co., according to an Algosaibi official who spoke on condition of anonymity. Algosaibi said last week that TIBC’s creditors weren’t paid “pending a debt restructuring exercise.” The bank has $2.2 billion of short-and medium-term debt, according to a May 16 report by Capital Intelligence, a credit analysis and ratings company.

“Although Mr. al-Sanea was at one time named as a managing director of Ahmad Hamad Algosaibi & Brothers Co., he has not acted in such capacity for many years and is not involved in the operations of Ahmad Hamad Algosaibi & Brothers Co. in any way,” a London-based spokesman said on behalf of Saad Group in response to questions from Bloomberg News. The spokesman said al-Sanea doesn’t manage TIBC.

$7 Billion Fortune

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. They spoke on condition that they not be identified because the information is confidential and they’re not authorized to speak to the press.

The central bank didn’t respond to two e-mails seeking comment on al-Sanea after the governor’s office asked for questions to be submitted electronically.

Al-Sanea’s net worth is $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, according to an HSBC filing. The stake is worth about 2 billion pounds ($3.28 billion).

Al-Sanea’s Saad Investment Co. received a $2.82 billion loan from a group of 26 European, U.S., 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 $5 billion as part of a 20-year plan to diversify investments inside and outside the kingdom.

MEED Report

The Middle East Economic Digest reported on May 23 that Algosaibi had defaulted on $1 billion of foreign exchange transactions, trade finance loans and swap agreements. The magazine cited unidentified bankers.

The default by TIBC, Algosaibi’s Bahrain-based unit, was a “conscious decision not to honor debt payments,” even though the bank’s $400 million equity portfolio means it had enough money to do so, Standard & Poor’s Ratings Services said May 12.
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