Tuesday, June 15, 2010

AlGosaibi v Maan AlSanea - Bahrain Court Rules Documents Not Forged AlGosaibi to Appeal

A bit of a bombshell from Frank Kane at The National today.

The Bahrain Chamber for Dispute Resolution ruled "at the end of last month there was no evidence to show the signatures were not genuine."

The AlGosaibi's intend to appeal.  And is usual with the Bahraini Court system, it will be up to the Cassation Court (Bahrain's highest Court) to render the final judgment.


Anonymous said...

And why is this a bombshell? The Algosaibi's own paid expert witness testified in the Cayman Islands court recently that her prior testimony was incorrect and that there was no evidence of forgery. Their Saudi lawyers dropped them "noisily" almost a year ago because of the baselessness of their claims.

Abu 'Arqala said...


Thanks for your post.

I think it's a bombshell because until now there was no judicial determination.

As to the testimony of the expert, if I recall the press report, her most recent testimony concerned documents given to her by the Saudi authorities which they attested were documents signed by Sulayman. I suspect that these are not the various loan agreements and other correspondence which is the subject of the dispute between AlGosaibi and Mr. AlSanea - but rather other documents.

Also as I understand that testimony she said that there were so many inconsistencies in the way Sulayman was signing his name that she couldn't get a base to make a determination.

Now that's all based on press reports. And my experience is that the press often gets things wrong -- particularly in the GCC.

So if you can post a link to her testimony I'd be happy to review it and be corrected if that's the case.

Also I'd note that as per the press report I cited in this post the AlGosaibi's intend to appeal the Bahraini Court's ruling - which would imply that they have not abandoned this argument.

Anonymous said...

It stands to reason that if hundreds of documents signed have been determined to be valid as to the signatures and TIBC (and these documents were related) then the underlying complaint of AHAB that they were unaware that TIBC existed is ludicrous.Their further contention is that they were unaware TIBC was borrowing money for them. This establishes a serious inconsistency. Also, the power of attorney given to AlSanea has been determined to be valid therefore anything signed by AlSanea on behalf of AHAB is not a forgery because he had the authority to sign for them. AHAB's paid expert witness backpeddled from saying everything was a forgery to saying she was unable to render an opinion . Of course they are going to appeal. It stretches things out further.

Abu 'Arqala said...


Thanks again for your post.

Sorry to be a bother, but do you have a link to testimony that backs up your statement that "hundreds of documents have been determined to be valid as to the signatures"? If this is the case, then I'd like to post this - citing the name of the expert and how/when this testimony was given. As well as some background on the expert's qualification. It seems from your post that the AlGosaibi's expert is not saying the documents are validly signed but that she cannot make a determination whether or not they were.

I say this because I recall reading an earlier report that said many of Sulayman's signatures were computer generated scans - later applied to documents.

On the issue of the existence of TIBC, it certainly boggles the mind that the AlGosaibis claim not to have been aware of the existence of TIBC. With the publicity about the bank, annual reports, etc, there would have to be many individuals who came into contact with them who would refer to their Board membership and ownership of the Bank.
And there would have been the various Central Bank of Bahrain procedures to found the bank. And those to qualify directors as "fit and proper". If this all was done with no direct contact by the CBB to the AlGosaibis, then the CBB needs to revisit its procedures.

On the Power of Attorney in favor of Mr. AlSanea, assuming this is validly signed by Sulayman, it would establish his legal right to undertake activities on behalf of the AlGosaibis. But the existence of the POA would not be a carte blanche to do whatever he wanted. He would be bound to the duties of a wakil. If he exceeded or abused that authority, then he would be liable to the AlGosaibis. And if he broke any laws, perhaps criminally liable. So the POA is not an absolute defense to what he may or may not have done.

Of course, it such a situation - at least under laws in the USA - the AlGosaibis would be responsible to innocent third parties for his actions. They could not seek to void these claims by asserting bad conduct by Mr. AlSanea.

The Hibis and Ernst and Young Reports as well as the various court filings certainly raise a lot of issues of the way in which TIBC and Awal conducted business. And frankly at least to my mind do not case the parties involved including those in senior management positions in a particularly good light. Nor some of the counterparties.

Anonymous said...

If someone is validly appointed as the agent of someone else and acts as such agent and it is clear that those appointing him as agent are aware and give written approval for every action taken there is no fault on the part of those who implement any instructions given by the agent and signed and endorsed by those giving the agency.
If someone is unable to determine sufficient evidence of forgery there is no case for forgery - as ststed by the Bahrain Tribunal on Financial Affairs.(It might be called something else the Tribunal that is)
Virtually everything released to the press has been released by AHAB or its hired Public Relations firms.
TIBC and AWAL are completely separate legal entities despite the attempts to confuse them in the mind of the public and the law.

Anonymous said...

As to many people being personally aware of AHAB knowledge of TIBC transactions-exactly.

Abu 'Arqala said...


Thanks again.

Your argument rests on what appear to be - as far as I can tell - two assertions. That the POA is validly signed. And that the AlGosaibis were aware of each action taken by Mr. AlSanea and approved each in writing.

What's the basis for this? If you have this proof, then you have undermined the central allegation of the AlGosaibis.

It would be extremely helpful if you could share your sources for these as without them they are little more than mere assertions. Hard to build a case on postings by Anonymous.

As to the public relations war, any idea why Mr. AlSanea is a pacifist?

As to TIBC and Awal, the court filings I've seen show a very direct link between the two banks. Funds from TIBC transactions seem to have "wound up" at Awal. And taking the Hibis and E&Y Reports at face value, Mr. AlSanea appears to have run both banks with the management in place in both banks seeming to be little more than figureheads.

Anonymous said...

TIBC is owned by the AHAB.AWAL is owned by SAAD. There is connection by common individuals but these banks were not run without a serious fire wall in place. Funds were legally borrowed and loaned as authorized by the Board of Directore of TIBC which was Chaired by Sulaiman.A POA is not signed in SA-the individual granting the POA must show up in person with two witness es as to his identity and the POA is notarized and formally stamped by the Chamber of Congress. It is very inclusive. The court filings that you have seen would be those of AHAB.
The living members of AHAB may have been unaware of details. The Chairman of the Board is now deceased. Thus the insistance upon forgery as a gambit to avoid paying of debts.It would have been the duty it seems to me for the owners of AHAB to have read their own Financial Statements before filing them with appropriate bodies in SA.Either they approved of such activities or were negligentin their duties, it would seem to me.
Management implemented as instructed by the Chairman of the Board Sulaiman ALGosaibi and the other members of the Board in writing.All information was sent to AHAB for inclusion in annual reports. Did they not read their own reports?
If I got an expensive lawyer and a PR firm and filed assertions with the court would that make them more believable? A family owned company is very different in nature to a corporation where manahement is far freer to make independent decisions as the Board functions as a stand in for diffuse ownership and management has authority vested in it. I have no idea what thestrategy of Mr. ALSanea might be in this regard.

Abu 'Arqala said...


Thanks for your reply.

Actually, many of the documents I have read are not assertions by AHAB. In its case Ahli Bank of Kuwait provided copies of Swift messages and applications for letters of credit. As to movement of funds, while submitted by AHAB's attorneys, copies of account statements for TIBC and Awal have been provided - which appear to have been certified by officers of some of their NY correspondents. And there are the reports by Hibis and Ernst and Young as well as references in the E&Y to a Deloitte Report which appears to support contentions of fraud in TIBC's loan portfolio.

Everyone who was a director of the two banks and everyone who was in management bears responsibility.

Sorry to disappoint you but I don't buy the "family business" argument. There is a proper way to run a bank. And there is an improper way. And unlike football, there are no "Australian" or ME "rules" for banking.

As to whether the Al Gosaibis were aware of TIBC and their directorship roles, this should be quite a simple matter to resolve.

Under Bahrain Commercial Company Law 2001, each person who is asked to serve as a director must respond in writing accepting that position (Article 193). Under CBB regulations, each director must submit a multipage form outlining his/her qualifications.

After each Board meeting, the directors present at the meeting must sign the minutes when they are prepared and the company must maintain a formal register of such signed minutes (Article 194).

At least once a year, each bank in Bahrain must submit a report to the Central Bank outlining the Board meetings (including subcommittees) and who attended and how (if in person, via teleconference, etc).

Article 180 limits the use of proxies for Board meetings.

So if members of AlGosaibi Family were directors, then all the above should exist in TIBC's files. Quite an easy matter to settle.

Under the Central Bank of Bahrain's Rulebook #1 (to which TIBC would be subject) Module HC - a Board is required to evaluate the contribution of each Board member and remove directors who are not contributing (HC-1.3.1).

HC-1.3.4 contains CBB guidance that banks should establish rules requiring members to step down if they are not actively participating in meetings.

Attendance by proxy is not making a contribution or participating in a Board meeting.