America won't prosecute bankers for fraud, but ...

Saudi Arabia's Al Gosaibi family launches $9bn legal claim against US exec

by Frank Kane, The National Newspaper, Abu Dhabi, UAE

Last Updated: Mar 30, 2011

Glenn Stewart, former chief executive of The International Banking Corporation (TIBC), is facing a legal claim of at least $9 billion (Dh33bn) in America from the Al Gosaibi family of Saudi Arabia.

Ahmed Hamad Al Gosaibi and Brothers (AHAB), the family's partnership, has filed an action in California that alleges aiding and abetting fraud, breach of fiduciary duty, fraud and fraud conspiracy, and unjust enrichment while he was chief executive of the now bankrupt Bahraini bank.
Mr Stewart, who fled Bahrain last year for his native California, said in an e-mail to The National that he would respond in detail once he had time to study the claims, but denied all the allegations.

The action against Mr Stewart is only the second against an individual executive in the dispute between AHAB and Maan Al Sanea, the head of Saudi conglomerate Saad Group. Claims have also been filed against Mr Al Sanea.

The Bahrain authorities have held a criminal hearing involving 15 executives of either TIBC and another Bahrain bank, Awal, including Mr Stewart and Mr Al Sanea.

When TIBC and Awal collapsed in May 2009 it sparked a corporate battle between AHAB and Saad that has led to allegations of multibillion dollar fraud and legal actions on three continents.
Mr Al Sanea has consistently denied the allegations.

The California action alleges that TIBC "was a sham bank and had no real customers. Mr Stewart knew that it had no real customers, having played a central role in fabricating and documenting a portfolio of dummy borrowers to make it appear TIBC had real banking business, in fraud of regulators, lenders and AHAB.