Standard Bank sues Mohamed bin Issa al Jaber over alleged unpaid loans
Standard Bank sued Saudi billionaire Mohamed bin Issa al Jaber for $150m in a London court, saying loans made to companies in his MBI International & Partners group weren’t repaid.
The bank says al Jaber personally guaranteed three loans to JJW Hotels & Resorts and Ajwa for Food Industries in 2008, according to court papers outlining its claim.
Al Jaber, Saudi Arabia’s third-richest man according to Arabian Business, believes he has a claim against the bank over a $96.5m loss from unauthorized foreign-exchange trades, his lawyer Catharine Otton-Goulder said at a pre-trial hearing.
He blames Standard Bank, a unit of Johannesburg-based Standard Bank Group, for the trades from a personal account he held with the company and says the loans were provided to cover the foreign-exchange losses.
Al Jaber has fallen from 62nd to 136th in the Forbes list of the world’s wealthiest individuals. While MBI has assets of $9bn according to al Jaber’s website, the businessman has “found himself without sufficient funds for personal expenses” and has 5 million pounds ($8m) of debt to suppliers, Otton-Goulder said.
Al Jaber’s lawyers want to investigate the relationship between his personal adviser and the bank. They say the adviser was responsible for negotiating a deal with Standard Bank to settle the debt. There was a “clear conflict of interest” in undisclosed remuneration from the bank to the adviser, which “should be fully investigated in evidence at trial,” according to court documents filed by al Jaber’s attorneys.
Janice Garraway, a spokeswoman for Standard Bank in London, declined to comment on the case via e-mail on Thursday. Gary Pegg, an attorney for al Jaber, didn’t respond to an e-mail requesting comment.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Good for Al Jabr. Banks and investment houses do not really care if you lose or make money, they just want to do the trade for you; their commission is made either way. However, if there is money to be lost, it will never be the bank's own money if they can help it, it will definitely be the investors. Watch how the Bank will settle with Al Jabr, this suit is not good for business at all.