Ahab unlikely to share 'personal affairs'

Family offices of the troubled Saudi groups Ahmad Hamad Algosaibi and Brothers (Ahab) and Saad Group should not be expected to share details of their "personal affairs", said a senior executive of Deloitte. The consultancy firm is advising the Algosaibi group.

Terming it "completely wrong" to blame the family offices of the Saudi groups for the crisis, Neven Hendricks, Chief Operating Officer for Mena, Deloitte, told Emirates Business: "I saw media tearing the family offices apart and blaming them for the crisis and unfairly so. There is no compulsion for a family to tell the world about its personal affairs. It is like asking me to show my personal tax returns. I think that is unfair for the public to expect private families to behave like that."

Recently, S&P had said that the gross exposure of GCC banks to the Saad and Algosaibi groups is about $9.6bn (Dh35.2bn) while Standard Chartered said Saudi banks have almost $5bn exposure. According to analysts, it may take banks at least another quarter to completely write off these provisions. The exposure of banks to the Saad and Al Gosaibi brought forth the issue of lending to conglomerates that had "family names" attached to them.

While asserting that he was not against transparency, Hendricks said in case of Algosaibi, it was the banks' responsibility that got involved in transacting with them to check the financial details. "It is akin to me going to a bank for a loan and they do not ask for my salary statement, do not do a credit check on me. I am not at fault in that case.

"What has happened in the region is that best practices have fallen down. It's not just the indigenous banks in the region it's international banks also. I am all for transparency but as and when it is appropriate. If it is a private company and privately held that firm has no duty to general public.

But if it's a listed company, the debate is if it should give full disclosure, because general public has full interest in that," he said.

On disclosure problems for public companies, he said: "There have been disclosure problem for public companies and there it is the regulators who have to put their foot down. Now will it happen? I think so because governance in the region has improved leaps and bounds.

"I do believe you would see regulators clamping down on disclosures."

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.