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Sun 15 Jan 2012 08:18 AM

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Aussie Islamic school sues Saudi Arabia for $2.1m

Brisbane school claims it had to take out bank loans to cover fees owed by Saudi pupils

Aussie Islamic school sues Saudi Arabia for $2.1m
The Islamic school is suing to recover some $2.1m from the Saudi government. [Picture for illustration only]

A small
Islamic school in Brisbane, Australia is suing the Saudi government for
AUS$2.1m ($2.1m) in a last-ditch attempt to recoup money owed to it in unpaid
school fees for Saudi pupils.

The Australian International Islamic College has claimed the
oil-rich kingdom has repeatedly failed to pay the outstanding charges related
to tens of Saudi nationals educated at the school.

“The
total outstanding fees at the moment are just over $2m. We’ve spent a lot of
money trying to recover this money,” Keysar Trad, the school’s CEO, told Arabian Business.

The dispute dates back to an earlier error
made by the school, which saw it wrongly receive Australian government funding
to educate the Saudi pupils from 2005 to 2008.

Parents
of overseas pupils in Australia must prove they can pay AUS$8,000 a year to put
their children through education in the country. But in this case the student’s
parents, on territory education scholarships from Saudi Arabia, were not
billed.

When the
error was discovered in 2008, the school was
forced to repay the government grants. But the error has been compounded by the
AUS$1.2m in fees the school claims it is owed by the government of Saudi
Arabia, which the Gulf state has refused to pay.

“We have
had to take out loans because we have had to pay the government money back. Our
loans are quite substantial and are in excess of the amount that is owed to
us,” said Trad.

The school has played host to up to 120
Saudi students each educational year.

“The alternative [to us taking legal action] is
that a small school goes into substantial debt and pays interest for the
education of Saudi pupils. The Saudi embassy to this day has not given us a
legitimate reason as to why this money has not been paid.”

An estimated
130,000 Saudi students are educated abroad each year, largely on scholarships
funded by the Gulf kingdom’s government. An estimated eight percent of pupils
are educated in Australia, with the US receiving the bulk of Saudi students.

David
Roberts, executive director of Independent Schools Queensland, said the
Brisbane school is seeking to recover both the back-payments for the years from
2005 to 2008 and the fees since then.

“One is
for the period 2005-2008 in which the school has had to pay back to the
government $1.4m for funding it received for the students. The school has been
trying to get that money back because it should have been the government or the
sponsoring organisation out of Saudi paying it,” he said.

“The
second lot of debt relates to the fact that since 2009, the school has started
rightly charging the parents and issuing them with invoices to give to the
Saudi cultural mission in Canberra. There is about $70,000 of that money also
outstanding.”

In court
documents filed to the Supreme Court of New
South Wales, the Australian International Islamic College claims the Saudi
Ministry of Higher Education provided assurances to it and the local and
federal government of Australia that “the costs of educating the children of
scholarship recipients who were studying at the college would be met by the
defendants”.

“It is
clear that the Saudi pupils made the promise to the Australian government that
they would pay $8,000 per year for the education of their children – where is that
money?” said Trad.

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