A prominent Saudi businessman is preparing to sue Barclays Bank for $10bn in damages over alleged corrupt activities in the kingdom, according to the Financial Times.
Mohammed bin Issa Al Jaber, chairman of MBI International and founder of Jadawel property group, claims the UK-based international bank conspired with Saudi ministry officials during its negotiations for a licence in the kingdom.
Al Jaber said the actions amounted to bribery and cost his company $10bn worth of revenue over a decade.
“In exchange for assistance in obtaining a valuable licence to conduct banking activities in the kingdom and other undisclosed corrupt activities, Barclays conspired with certain officials of the kingdom to injure petitioners’ business, reputation and access to credit,” a court document says, according to the newspaper.
According to the documents sited, Jadawel leased two properties to the Saudi Ministry of Defence and Aviation (MoDA) in 1999 for what would have been $1.4bn in rental payments over 10 years.
The expected income was used to secure a $900m syndicated loan from Barclays and other lenders.
However, in 2002 it is alleged MoDA made a late payment and then defaulted on the outstanding amount owing, causing other banks to refuse credit to MBI, resulting in $10bn of damages, the documents say.
Barclays launched legal action against MoDA but discontinued the case shortly after.
Al Jaber alleges Barclays’ actions “amounted to ... bribery”.
He has initiated preliminary legal action, demanding Barclay’s law firm at the time, White & Case, hand over documents relating to a “confidential” settlement between Barclays, MoDA and another Saudi Arabian ministry in 2003, according to court documents filed in New York last week.
The legal action has arisen out of a US Department of Justice inquiry into Barclay’s dealings in Saudi Arabia, according to the Financial Times, and is another downfall for the bank.
It already is under investigation over its dealings with investors and clients in Qatar and Saudi Arabia.
Barclays, which earlier this month announced it would sell its UAE retail operations, is in the process of sacking 3,700 staff globally and is planning a £5.8bn rights issue next week after it was revealed the bank had a £12bn regulatory capital shortfall.For all the latest business 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.
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