A New York court has ordered four international banks to provide evidence in the investigation of an ongoing financial dispute between two prominent Saudi parties, with one of them accusing another of defrauding them of nearly $10billion.
Honourable Jed Rakoff of The United States District Court for the Southern District of New York ruled that Ahmad Hamad Algosaibi and Brothers (Ahab) has the right to discovery documents related to foreign proceedings against Bank of America, Citibank, Standard Chartered and HSBC, but ordered Ahab to cover the banks’ cost of providing the requested documents as it termed the process ‘burdensome’ and ‘costly’.
Ahab says it has been fighting with banks for months for documents that it believes can trace how up to $1 trillion flowed through US banks as what it alleges is part of one of the largest money laundering schemes in history.
Ahab has accused Maan Al Sanea, a Saudi businessman married to one of the daughters of Ahab’s founder, of using a money transfer business owned by the Algosaibis to siphon funds into his own accounts.
Al Sanea has denied any wrongdoing and has vowed to vigorously defend himself against all charges.
At the same time, a number of banks that have been involved in various Ahab units defaulting on loan commitments due to the alleged fraud are in litigation with Ahab and its units in a number of courts around the world, including in Saudi Arabia, the UAE, US, Cayman Islands and Bahrain.
The four banks named in the recent order had previously submitted objections to Ahab’s 1782 petition. “To date, these banks have refused to provide Ahab with essential records that will show up to $1trillion of ‘dirty’ money moving in and out of all four banks,” Eric Lewis, Ahab’s chief legal advisor and partner of Baach, Robinson & Lewis, said in a statement sent to 'Emirates24|7'.
“These accounts, which were controlled by Maan Al Sanea and his deputies and used to facilitate his global ponzi scheme, will provide critical evidence of how the fraud was perpetrated, who was involved and where some of the misappropriated money may have gone,” he alleged in the statement.
However, in his judgement, Judge Rakoff ruled that Ahab would have to shoulder the cost of discovery, which the court said was likely to be costly. “Recognising that producing the requested discovery will likely be costly and burdensome, the court orders petitioners to bear 100 per cent of the costs of this discovery,” the judge ordered according to court documents seen by 'Emirates24|7'.
“Since the court is satisfied that the documents Ahab is seeking are relevant to the foreign proceedings and ‘for use’ in the foreign proceedings, the fact that Ahab may also be able to use the discovery in future litigation against the respondents [banks] is immaterial.”