AlGosaibi v Maan AlSanea - The Importance of Singularis

Sunday's AlSeyassah Newspaper from Kuwait has published what it claims is new information on the above case from letters that the Central Bank of Bahrain ("CBB") Governor HE Rashid al Maraj sent to the legal authorities in Bahrain as well as some additional information about the recent Cayman Islands Court ruling against Mr. AlSanea regarding what the Court deemed were violations of Order to freeze his assets.

The latter is the most important bit of "news" in the article.  Most press reports have focused on the US$60 million payment and in passing noted the attempt to liquidate Singularis, one of the companies in the Saad Group.  Not much more is said about Singularis.  The hot topic is the US$60 million.  AlSeyassah believes the US$60 million is relative "chicken feed".

According to AlSeyassah's "legal source", Singularis holds Mr. Al Sanea's 3% stake in HSBC which is worth roughly US$5.39 billion as of the close of business 29 March 2010.  This source asserts that the attempt to liquidate Singularis was an attempt to get the HSBC shares outside of the freeze order.   Singularis being one of the companies specifically named in the Caymans Freeze Order.

The Court has ordered the return of the US$ 60 million within 30 days.  More importantly, its action supposedly will put the stop on the "thawing" of the HSBC shares ensuring they remain under the Cayman Freeze Order.

What else does the AlSeyassah article state? 

As usual my comments appear in blue italics and preceded by AA.

1. First, the documents that AlSeyassah based its article upon date from approximately one year ago.  AA:  Given that time period, there may have been a refinement of earlier findings and charges as  further investigation took place and/or new data came to light. That might possibly even include a retraction or reduction of earlier charges. Or additional charges.  As is clear from other press reports, the investigative process in Bahrain continues with respect to both Awal and TIBC.  Once the process is complete, then the Kingdom's legal authorities will decide what cases, if any, to file.
2. HE Rashid Al Maraj, Governor of the Central Bank,  referred violations of law at Awal Bank to the Attorney General of Bahrain, Mr. AlSayyid Abdul Rahman Al Sayyid, and at The International Banking Corporation ("TIBC") to the Public Prosecutor, Dr. Ali Bin Fadl AlBuAynayn,  and recommended that certain individuals be prohibited from leaving the Kingdom.  I've posted on this before and here is the link.
3. With respect to Awal Bank, the preliminary results (AA:  note the word "preliminary") disclosed numerous violations ( مخالفات = as in violation of a law or rule) of CBB rules and improper actions  (تجاوزات = improprieties or exceeding boundaries) in the management of the Bank that constitute a form of deception, abuse of trust, embezzlement, and money laundering.  
4. Continuing on Awal Bank, that the management of the bank created the appearance of profits through fraud and forgery.  The bank did not apply the regulations for anti money laundering which led to the suspicion of the bank's involvement in these operations.   AA:  You'll recall that the Hibis Report submitted in the New York Supreme Court Case had Evidence Case File #3 redacted, though not completely.  Page 26 of the Report was labeled money laundering.  And if you don't, here's the link.  Allegations of money laundering may conjure up images of narcotraficantes with suitcases full of currency.  But one can launder money in one's possession just as one can launder one's own clothes. 
5. With respect to TIBC, the report is free of mention of the AlGosaibi Family.  Rather it states that the management of TIBC co-operated with an external party in the  completion of most of the operations which the bank engaged and from which this external party benefited against the interests of the bank. According to AlSeyassah, HE AlMaraj's letter names Mr. AlSanea as that external party saying he was in direct contact with TIBC's management for years to effect these schemes.
6. Continuing on TIBC, that the management conspired to take loans and deposits from local and international banks to fund a loan portfolio to imaginary and paper individuals and companies.  And that loan files were forged to give the appearance that the loans were valid.
7. That Mr. AlMaraj's letter stated that the violations at The International Banking Corporation included the forging of the signatures of the owners (AlGosaibi) in some documents.

And as usual some caveats on what was just presented.

1. First, not everything one reads in the press or on the Internet is true. 
2. Second, an allegation is just that, an allegation.  It is proof of nothing.  Even an allegation by an official government body or officer of a government.
3. Third, an official indictment for a crime is also not equal to a conviction.  It is not a proof of guilt.  It is merely the start of a process which hopefully leads to the determination of the facts of guilt or innocence.
4. Fourth, the Court makes that determination.  As of today, I'm not aware that any court has made any ruling.
5. Fifth, Mr. AlSanea and his counsel are on the record as vigorously contesting the allegations made against him and his companies.