Global Investment House v National Bank of Umm AlQaiwain: NBUQ Deposits US$250 Million with Dubai Court

National Bank of Umm al Qaiwain ("NBUQ" or "NBQ", if you prefer) announced on the Abu Dhabi Stock Exchange this morning (23 August) that earlier this morning (the 23rd) it had deposited the US$250 million which is the subject of the lawsuit between it and Global with the Dubai Court.   It went on to note that previously the amount had been on deposit with the Central Bank of the UAE.  

NBUQ described this step as evidence of its good intentions in the matter.   It also noted that it had appealed the verdict of the Dubai Court of First Instance in Global's favor.  The first session of the Appeals Court is scheduled for 29 September.

As I've posted before, if NBUQ can drag the proceedings out, the pressure increases on Global to reach a compromise since it's facing a looming cash crunch due to the unrealistic and unprofessional repayment schedule imposed on Global by its "wise" lenders.  With markets as they are asset sales are difficult.   And the price of an asset fire sale probably much more than paying a break-up fee and forgiving the interest on the "deposit" (if you're Global) or "prepayment" (if you're NBUQ). 

Previous posts can be accessed using the tags "National Bank of Umm AlQaiwain"  or "Global Investment House Kuwait".

Lost in Transmission: AlBoom's US$20 Million

Boom!

Abid al Boom's slow moving US$20 million lands him in jail.

AlGosaibi v Maan AlSanea - More on The "Fix"

They say there is no surer proof of someone's intelligence than the fact that he or she agrees with you. (See point #3 below).

Echoing a theme raised here earlier, AlQabas has an update on the AlGosaibi and Saad debt restructurings:

1. AHAB has reportedly offered to settle with its creditors at 15 cents on the dollar, an offer that creditors are reported to have rejected as they did the earlier 9 cents offer -- absolutely.
2. Saad has offered to settle a large (but unspecified) portion of its debt to its creditors but noted that freezes on its assets in the USA and Europe resulting from AHAB lawsuits against it frustrated that desire.
3. The Saudi Government is currently undertaking intensive efforts to achieve an accommodation (or reconciliation) between the two groups so that reschedulings can move forward.

As you'll notice, Saad's offer is as well a strong tactical move to develop support for The Fix.

While the article doesn't contain proof of its assertions, nonetheless it clearly demonstrates remarkable insight -- at least using the principle stated in the first paragraph. 

The question remains will AlGosaibi itself get "fixed" in the process?

The Investment Dar - Musallam at Today's OGM - The Future is Bright

The following is based on AlAmir Yusri's article in the 10 August AlWatan.

Monday (9 August) TID held an ordinary general shareholders' meeting at the request of the MOCI in the words of Badr AlShamary, the representative of the MOIC, the meeting was called "in consideration for the shareholders, to protect the national economy, and in conformity with the Commercial Companies Law."  The Company will be holding its "own" OGM on 26 August.

Some 64.88% of shareholders were present and so there was a quorum.  AlWatan notes that the meeting was a vindication of sorts for the current management and board as not a single shareholder lodged a formal complaint or objection regarding management's or the board's conduct.  One shareholder did raise an objection about the MOCI's conduct with respect to TID.

During the meeting TID's Chairman and Managing Director, Adnan AlMusallam, made the following points:

1. TID is not going to be liquidated.
2. In fact its brightest days are ahead of it, apparently by 2012 if not sooner.
3. It has no "poisoned" assets but rather its assets are real.
4. While they were affected by the crisis, they did not die.  Such assets as Bank Bubyan, Aston Martin, Bank al Bilad, Oqyana and Khabaari are solid.
5. BLOM Bank has joined the restructuring after a conversation with the Company and the CCC - even after winning its court judgment in London.  (There is a critical difference between getting a judgment and getting the cash).
6. Now 83% of the creditors have agreed the restructuring.
7. Good progress is being made with Commercial Bank to come to a friendly resolution of the Bank Boubyan shares problem.
8. The Central Bank of Kuwait handled the crisis -- that's probably the global (small "g") financial crisis -- in the most professional of manners.
9. A small thing like a lawsuit wouldn't disturb our great relationship with the Central Bank.  (You'll recall that TID sued the CBK over what it claimed was unfair treatment concerning its 2008 financials).
10. TID has four month extension of the stay on legal claims against it in Kuwait.  You'll recall the Central Bank asked for an additional four months to decide whether to recommend for or against TID's final entry under the Financial Stability Law.

All in all a very optimistic assessment.  As Adnan noted even during the Iraqi invasion he refused to be pessimistic.  And if you've read the Arabic text closely ( ان شاء الله..والله على ما اقول شهيد ) , you'll have noticed that Adnan not only swore by God but also called Him as a witness.  So it's doubly hard not to take his comments at face value.

And no doubt with good reason.

Those persuaded by his performance will have to wait to buy shares as TID remains suspended on the KSE.

AlGosaibi v Maan AlSanea - The Financial Times "The Fix is In"

Here at Suq Al Mal some of the most vigorous exercise we get is from patting ourselves on the back. 

Before I head to the showers after this strenuous work-out, I'd just note that those who read Suq Al Mal read the main theme from today's Financial Times article starting back in June.  And most recently here.

From the FT:

The two decisions put a halt to the key cases at the heart of the scandal, and are a blow for Ahab, which has mounted an aggressive campaign against Mr Sanea, accusing him of a “massive fraud” that it claims could be as much as $10bn

Saudi officials have been tight-lipped about the dispute, and a high-level committee was set up to resolve the issue away from public glare. But it has reportedly been annoyed by the attention Ahab and its allegations have heaped on the conservative kingdom. 

And as always we close by noting that Mr. AlSanea continues to vigorously deny involvement in any fraud or other misconduct.

Dubai: The Emirati Goldfinger

Fancy expensive car proving honesty and sincerity.

Dubai is known as an important gold trading center.  Apparently the story of Damas is just one of many.

This is another.

An Emirati identified solely as AA, was taking gold from an Iranian woman, FH,  promising her he was selling to Russians at a "higher price".  Presumably because the Russians in the UAE are not sharp traders.  In one example, she gave him gold worth DH850,000 and he gave her a check for DH500,000.  

One could make a small fortune in such exchanges - though starting with a large fortune would be a prerequisite.

In any case the woman was sure this chap was on the "up and up". 

FH said that each time the accused, who addressed her as 'mother' visited her he used a different car. And, therefore, she believed whatever he said and never suspected him.

As Ken over at Wall St WTF can testify, justice has both a long arm and is swift in the Emirate of Dubai.  Interpol arrested the chap in Thailand and he's been arraigned in Dubai.

The accused has denied the accusation and the Dubai Misdemeanor Court has adjourned the case until August 9.

A couple of further notes.

Despite the similarity of names (AA), like a certain prominent Kuwaiti-Saudi businessman, I continue to deny any wrongdoing.  Mother, why won't you believe me?

And for Ken at Wall St WTF:

1. You've expressed some concern at your blog as to the  vigor (or lack thereof) in the legal pursuit of the Flying Abdullah Brothers.  Perhaps the judicial venue for this case  - the Misdemeanor Court - is an indication of the seriousness with which such crimes are viewed in the Emirate?
2. Also as one who has worked with the DIFX/DFSA, perhaps you can  advise whether Iranians are working there in senior management.  That potentially could explain a lot of things.  He called me "mother" when he signed his Enforceable Undertaking.

AlGosaibi v Maan AlSanea - Almost "Fixed"

There has been a remarkable reversal of fortune of late for AHAB.  

First was the decision by Trowers and Hamlins back in June to sue AHAB and which gave what I described as the first indication that the concerned authorities in the GCC were moving to make this messy problem "go away."   And that the Grant Thornton settlement proposal might be seen as a promising vehicle. to achieving that end.  Essentially GT's Plan involves a pooling of assets of the two companies to settle global creditor claims and the dropping of lawsuits between the two parties.  Those lawsuits have been the primary venue for the charges of fraud levied against Mr. AlSanea by AHAB.  Charges as we always note here on Suq Al Mal Mr. AlSanea continues to deny.  Ending the lawsuits probably allows "diplomatic cover" for jurisdictions to quietly let these difficult and embarrassing matters expire.

Yesterday (28 July) Asa Fitch at The National reported the Caymans Court decision to put its proceedings "on ice" to allow the special Saudi committee to make a determination.   I commented that it looked to me like the "fix" was in as this step increased the pressure on AlGosaibi to agree to the Grant Thornton settlement proposal and that:

A similar movement by the New York Supreme Court would, I think, confirm that this is what is happening. 

In what might be a remarkable judicial coincidence, but just maybe  is not,  today (29 June) NY Supreme Court Justice, the Honorable Richard Lowe III issued final disposition rulings effectively terminating the cases he was adjudicating based on "forum non conveniens".  

Frank Kane's article in The National provides some useful information.   But there's a bit more.  Judge Lowe did not just terminate the Mashreqbank cases but also that of AlAhli Bank which did not involve any countersuit by AHAB.

The three cases and their NY Supreme Court reference numbers are:

1. 601650/2009 - Mashreqbank v AHAB to which AHAB had added Mr. AlSanea and Awal Bank as a Third Party Defendants
2. 602171/2009 - Mashreqbank v the Individual Partners of AHAB
3. 602847/2009 Ahli Bank of Kuwait v Mr. AlSanea and Saad Trading Contracting and Financial Services

The decision (some 19 pages ) is Document 134 in Supreme Court Case Reference 601650/2009 which can be accessed at the NY Supreme Court Website  http://iapps.courts.state.ny.us/webcivil/FCASMain.

What's interesting about the decision?

1. First, Judge Lowe ruled that NY courts did have jurisdiction but dismissed the cases on the grounds of forum non conveniens.  Key reasons cited were: (a) availability of other judicial venues for the cases; (b)  presence of key witnesses in the Middle East; (c) local laws govern some key documents. (d) documents in Arabic language and witnesses English language skills, etc.  From the ruling it seems he sees Dubai as the venue for Mashreq's cases (with AHAB then able to raise its claim against Mr. AlSanea in Dubai or Saudi).  And Kuwait as that for AlAhli Bank's case.
2. Second, another significant "bit" of Judge Lowe's rationale for accepting the forum non conveniens argument was that Mashreqbank stated that it was happy to litigate in either NY or Dubai.  And  that in fact Mashreqbank had commenced a lawsuit in Dubai which includes (but is not solely restricted to) the FX transactions which are the subject of NY cases.  See Page 16 of the ruling.   Now, at first blush, this seems a bit surprising.  Why would Mashreqbank incur the not inconsiderable costs of launching a case in New York and then cavalierly toss it away by telling Judge Lowe that it was indifferent to venue?  Perhaps, the answer is to be found in AHAB's defense:  that Mashreq knew the FX transactions were disguised loans and that therefore they were somehow colluding with Mr. AlSanea.  A rather messy situation.  One complicated by AHAB's motion to have the NY Supreme Court compel disclosure under the very strict requirements of NY law.   Perhaps the shift to the more "convenient" judicial venue in Dubai would allow this issue to be dealt with in a more "convenient" way (at least for Mashreq).  And then again perhaps not.  Perhaps it was just a cost cutting measure - Mashreq decided to husband cash by running one instead of two expensive litigations.  And the case in Dubai is for almost twice that in New York.  So there is more "bang" per lawyer "buck" there.  Perhaps it was a belief that justice would be more swift in Dubai.  Perhaps it was another reason entirely.
3. The dismissal of the Ahli case is a bit more concerning - or perhaps should be to BNPP and Fortis who have lawsuits against Abu Dhabi International Bank.  If the Honorable Justice Melvin Schweitzer (who is handling the Fortis and BNPP actions) takes Judge Lowe's ruling as a useful precedent - both banks might wind up  in judicial venues they'd rather not.  NY has a very  large  well reasoned body of case law on letters of credit.  Bahrain would appear to have much less.  At least this could be a conclusion drawn from the Bahraini Court's ruling in ADIB's favor in both actions.  There the Court seemed remarkably unperturbed by the fact that ADIB's case was commenced after both banks had incurred irrevocable payment obligations.  Though to be fair, as I understand it, the Bahrain judgment is not final. 

AHAB does have the right to appeal Judge Lowe's ruling.  Overturning the ruling will I think be as the Japanese say "Possible but very difficult".

AlGosaibi v Maan AlSanea - The "Fix" is In? Caymans Island Case "On Hold" Pending Determination of Saudi Panel

Asa Fitch over at The National reports that the Caymans Island Court has suspended its proceedings pending determination by the special Saudi commission set up earlier to investigate allegations of fraud against Mr. AlSanea.

I had posited a bit earlier that for a variety of reasons various jurisdictions would prefer that this  messy dispute  "go away" - especially given the nature of the claims and counterclaims raised by the two protagonists.

The Caymans Court ruling seems to be another step in that direction.  A similar movement by the New York Supreme Court would, I think, confirm that this is what is happening.  If you've been following that case, you will have noticed that on several occasions the judge has mused (signaled?) whether Saudi is after all the proper forum.

Letting the Saudis make a determination as to who is guilty, if anyone, relieves foreign courts of the burden of decision making.  It also allows these jurisdictions to avoid antagonizing the Saudi Government, which no doubt would prefer that any dirty laundry involving its nationals be washed in private. 

And, if by chance, their proceedings result instead in a compromise solution - or "fix" - a pooling of assets to settle claims with a dropping of allegations of misconduct so much the better. 

The ruling is labeled a setback for the AlGosaibis, who as I noted are probably the party whose acceptance of the Grant Thornton "settlement plan" is key to moving forward.  Indeed it is a setback.  As such then it is a powerful incentive to "make a deal".

However, pressure remains on Mr. AlSanea.  The stay on his US$9.2 billion of assets has been reaffirmed.  And the Caymans Court has said that if the Saudi proceedings prove inadequate, it will reopen its own.  So if AHAB suddenly makes a generous offer of peace, no doubt plenty of incentive for him to reply positively.

And this is the usual appropriate place to note that Mr. AlSanea continues to deny involvement in any wrongdoing.

AlGosaibi v Maan AlSanea - BNPP versus Abu Dhabi Islamic Bank in re TIBC L/Cs

In discussing the Fortis lawsuit against ADIB, I mentioned that ADIB was also a defendant in a lawsuit brought by BNP Paribas' "Full Commercial" Branch in the Kingdom of Bahrain.

The relevant documents can be found at the NY Supreme Court Website http://iapps.courts.state.ny.us/webcivil/FCASMain  under Case # 603365/2009.   Or more precisely one document as all that is posted so far is the complaint by BNPP - missing what I'll bet ares some very interesting attachments.  Unclear why this is.  Especially since the submission in question dates from November 2009.

Here are the facts from the material posted on the NY Supreme Court's website:

1. In March 2009, ADIB issued six irrevocable reimbursement undertakings ("IRU's") in favor of BNPP to induce it to confirm 6 "commercial" letters of credit issued by The International Banking Corporation in favor of Dawnay Day and Co for the Account of AlGosaibi Trading Company.
2. BNPP confirmed TIBC's letters of credit and then upon presentation of the documents accepted the documents and the time drafts presented.  
3. On an unspecified date, BNPP claimed reimbursement of some US$44,875,000 from ADIB.  Presumably, the maturity date of the accepted time drafts.
4. ADIB refused to pay.
5. In September 2009 (after acceptance of the drafts by BNPP) ADIB obtained a judgment in Bahrain Court enjoining ADIB from making any payment.  
6. BNPP is seeking to have the Court issue a temporary restraining order preventing ADIB from moving assets (presumably balances in its correspondent accounts in NY) from the USA.
7. Its claim is for the principal of the payment (US$44,875,000) plus interest, attorney's fees and costs.

Now to some comments.

1. It's not clear to me why there isn't more precision in documents sent to the Court with exact dates when events took place, additional details of the individual transactions -  currency, goods, tenor, etc.  Perhaps time was of the essence and BNPP's lawyers wanted to file quickly to block the potential movement of assets outside of the USA. 
2. Dawnay Day was a very large "financial firm" with a commodities trading wing which ran into some "financial difficulties" as a result, I believe, of the global financial crisis (small "g" as always).  It was also an active participant in structured "Islamic" trade transactions as described in my post about Fortis.  It had at least one subsidiary Condor Trading which it uses so that the "purchaser" and "seller" of the goods are not the same party.  
3. It appears (but the documentary record here is very slim so this is an educated guess) to be a mirror of the Fortis transaction.  The TIBC L/Cs are one half of the "Islamic" structure:  the purchase on deferred terms.  For TIBC/AlGosaibi to actually get the funds a spot sale on a cash basis is required.  That could have been with Condor with TIBC Bank acting as the "arranger" of the transaction.   That is probably the most likely scenario and the one that I think happened - but again note this is an educated (or uneducated) guess.
4. Since discovery in other legal cases has resulted in the publication of  some details of at least the US - domiciled US dollar accounts of Awal Bank and TIBC, clever boots might be looking through that material for incoming credits around the time of the negotiation/acceptance (but not the payment date) of the first leg letters of credit. That is in the Fortis case the Awal Bank LC confirmed by Fortis under ADIB's IRU.  And in the BNPP case, the letters of credit issued by TIBC and confirmed by BNPP against ADIB's IRUs.  If these are indeed disguised clean money on money loans, the second leg (the spot sale) should have occurred around the same time.  The amounts would not necessarily be the same as interest on the loan might be built into the price on the first leg (the deferred payment).
5. But one key additional bit of information.  If we look at the Fortis Case (NY Supreme Court Reference 601948/2009 Exhibit #2 Document #34 Amended Declaration of Qays Zubi, we note two things.  First, TIBC LC's seem to have been denominated in Euros not US.  Second, a restraining order has only been obtained for four L/Cs not six as mentioned in BNPP's complaint.  The total of the L/C's mentioned in the Qays Zubi Declaration are some Euros 18,243,975.  Clearly, that does not equal US$44,875,000.  Two L/Cs are "missing".  Does that give Fortis a legal "wedge"?
6. We also learn that the payment dates on the TIBC L/Cs were between 22 June and 24 June.  You'll also notice that the certified translation has an error in that it shows the last LC as due March 23,2009.  The Arabic clearly states (in "Western" numbers not Arabic!!!) 23 June. 
7. The central point of BNPP's claim (like that of Fortis) is that under a documentary (aka commercial) letter of credit the bank's obligation to pay is independent of the commercial contract.  Its obligation is set by the terms of the letter of credit.  Compliance with the documentary requirements of the letter of credit establishes the obligation.  
8. To overcome the rather substantial amount of case law and precedents in favor of BNPP's legal position, I believe ADIB has to prove two things. (a)  Fraud in the inception.    (b) Involvement of BNPP in that fraud.  That is a a tough row to hoe as the saying goes.  

AlGosaibi v Maan AlSanea - Legal Case Summary and Status

Citi, the Delegate on Saad's Golden Belt Sukuk 1, has posted a notice on the BSE listing the legal cases  it is aware of involving Mr. Al Sanea and his companies as well as their current status.

Besides conveying useful information, the Delegate is putting Golden Belt Certificateholders on notice that other creditors of Mr. AlSanea and his companies are pursuing legal claims.  As long as Golden Belt Certificateholders are not, they are effectively in a junior position.

Why?

As I read the Delegate's last announcement, while a sufficient number of Certificateholders (more than 25%) have voted for Dissolution of the Trust, they have not indemnified the Delegate to its satisfaction.   That is, agreed to reimburse Citi for expenses.  Until that happens, the Delegate is not obligated to take the legal steps to dissolve the Trust, claim on the Repurchase Obligation of Saad Trading and Contracting, and in the event of non payment by STC pursue STC in Court.   Thus, the Certificateholders are effectively in a subordinate position against STC - they have an uncalled guarantee.  

The Delegate is doing this to cover its legal posterior.  In the event that the Certificateholders' recovery is adversely affected by failure to take action, the Delegate will have a legal defense that it has done all it  was obligated to do to protect their rights.

The thorny issue for Certificateholders is whether they agree to repay Citi for legal expenses involved in taking such actions.  Will the net recovery after the expenses be more than if they did not take action?

And this is I suppose as good a place as any to note that Mr. AlSanea still denies any improper or illegal behavior.

Aayan Leasing and Investment - MOCI Shareholders' Meeting 10 August

Aayan (no doubt with a bit of encouragement from the MOCI) announced on the KSE this morning that its ordinary and extraordinary general shareholders' meeting will be held on 10 August at the MOCI premises at 11 AM.   I expect this will be an "interesting" meeting as the centerpiece will be the MOCI's presentation of its report on the Company's financial condition as well as certain violations it believes have occurred.

The KSE also noted that it had not yet finished its review of ALI's  2009 financials and would publish them once it completed the review.

[11:43:59]  ِ.اجتماع الجمعيه العمومية لشركة اعيان للاجارة والاستثمار ( اعيان )‏
يعلن سوق الكويت للاوراق المالية بأن شركة اعيان للاجارة والاستثمار (اعيان)‏
شركة موقوفه عن التداول لعدم تزويد ادارة السوق ببيانات 31-12-2009 وبيانات ‏
ِ31-3-2010 وقد افادتنا بانه قد حدد موعد لاجتماع الجمعيه العمومية العادية
والغير عادية يوم الثلاثاء الموافق 10-8-2010 في تمام الساعة الحادية عشر
صباحا في وزارة التجارة والصناعة .علما بأن ادارة سوق الكويت للاوراق ‏
المالية لم تنتهي من دراسة البيانات المالية السنوية عن السنه المالية ‏
المنتهية في 31-12-2009 والتى تم تقديمها لادارة السوق بتاريخ ‏
ِ18-7-2010 وسيتم خلال اجتماع الجمعيه العمومية العادية والغير عادية ‏
مناقشة جدول الاعمال المرسل للمساهمين ‏
وسوف تقوم ادارة سوق الكويت للاوراق المالية بنشر بيانات 31-12-2009 ‏
لشركة اعيان الموقوفه حاليا عن التداول فور الانتهاء من دراسة البيانات ‏
المالية للشركة ‏

Aayan Leasing and Investment - MOCI to Press Forward with Shareholders' Meeting

Muhammad Sha'baan at AlQabas reports that the Ministry of Commerce and Industry is determined to push forward with the shareholders' general meeting it has called and which will take place in early August.  At that meeting the MOIC will deliver its report to shareholders on the Company's financial condition as well as violations of various laws and regulations committed by the Company - including the delay in releasing financial statements, holding the required shareholder's annual meeting along with other unspecified violations.

As per the article, the MOCI does not intend to tell the shareholders what to do but expects that they will in light of its report take action.  It will also refer certain violations to the Public Prosecutor for investigation.

The Company has apparently tried to get the MOCI to let it set the agenda for the meeting.  The MOIC has refused and has noted that the shareholders' meeting it has called will take place prior to any OGM that the Company may call. 

Apologists for the Company have reportedly argued that the Company was unable to secure the Central Bank of Kuwait's approval of its financials until just recently and so it shouldn't be held accountable for the delay in financials.  Further as financials are a condition precedent to an OGM, neither should it  be blamed for the failure to hold the OGM.   Critics have retorted that the Company delayed in providing certain information to the Central Bank and is therefore, after all, culpable.

Global Investment House v National Bank of Umm AlQaiwain: GIH Proposes Negotiations?

In what is billed as an exclusive interview with AlWatan, Amir Yusri writes that Badr AlSumait, GIH's CEO, said that Global's doors remain open to NBUQ to discuss an amicable solution outside of the court room.  One that would of course respect GIH"s right to the deposit.

As you'll recall from earlier posts on SAM, the Dubai Court of First Instance has ruled in GIH's favor ordering NBUQ to return the deposit with legal interest at 9%.

It's hard to know what is at play here.  

Is GIH concerned that NBUQ will launch an appeal and win?  Or that it will be able to tie up the funds for a prolonged period - a rather dangerous development for GIH given the unrealistically short repayment tenor on its restructuring?  

And thus by offering to accept a lower interest rate or a staged repayment to secure repayment?  And a relatively prompt repayment?

Aayan Leasing and Investment - Press Release on 2009 Financials

Below is Aayan's announcement of its 2009 financial results from the KSE.  As usual Arabic only.  If you're wondering why Total Liabilities and Equity don't foot to Total Assets of KD510 million, the difference is Minority Interests of KD 42 million.

Looking at Aayan's 3Q09 financials, it's pretty clear that the bulk of the loss was due to the watchful eye of the Central Bank of Kuwait which no doubt suggested that ALI recognize  in 4Q09 an additional KD50 million of its full year losses of KD77 million.  That latter figure includes the share of Minority Interests in the loss - roughly KD3.8 million.  When the full report becomes available, it will be possible to refine that calculation. 

For those who don't read Arabic:

1. The first line is net profit/loss.  KD(73.3) million
2. The second net profit/loss per share.  KD(119.18)
3. The third current assets.  KD162.2 million.
4. Then total assets.  KD510.1 million.
5. Then current liabilities.  KD400.4 million.
6. Then total liabilities.  KD436 million.
7. Then shareholders' equity (excluding minority interests).  KD31.2 million.
8. 2009's figures are on the right with comparable 31 December 2006 figures on the left. 
9. And to facilitate your reading, I've included after each of the categories above the rounded 2009 figures.

That information is followed by standard details on related party transactions:  KD0.321 million of income and KD4 million of expenses.  The fact that the Board has decided to recommend against a cash dividend for 2009.  The longish bit is an extract from the auditors' comments on the Company's financial condition (summarized in my post yesterday so I won't repeat here) along with the comment that ALI's accumulated losses exceed three-quarters of its legal capital and so in accordance with Article 171 of the Commercial Companies Law it is required to call an extraordinary shareholders' meeting to come up with a solution.  The options are  (a) raise new equity, (b) reduce capital or (c) dissolve the Company.   A solution can involve both options (a) and (b).

[8:17:36]  مجلس ادارة (اعيان) يوصي بعدم توزيع ارباح عن عام 2009‏
يعلن سوق الكويت للأوراق المالية بان شركة اعيان للاجارة والاستثمار (اعيان)‏
افادت ان مجلس الادارة قد اجتمع يوم الاثنين الموافق 12-07-2010‏
واعتمد البيانات المالية السنوية للشركة للسنة المالية المنتهية في 31-12-09‏
وفقا لما يلي:‏
ِ1) نتائج أعمال الشركة:‏
البند             السنة المنتهية في 31-12-09   السنة المنتهية في 31-12-08‏
الربح(الخسارة) (د.ك)           (73.358.493)            413.729‏
ربحية (خسارة)السهم(فلس كويتي)   (119.18)                 0.68‏
اجمالي الموجودات المتداولة     162.182.723       259.676.790‏
اجمالي الموجودات              510.109.513        600.822.985‏
اجمالي المطلوبات المتداولة     400.371.774       333.762.993‏
اجمالي المطلوبات               436.985.779      450.438.515‏
اجمالي حقوق المساهمين        31.200.238        101.523.604‏
بلغ اجمالي الايرادات من التعاملات مع الاطراف ذات الصلة مبلغ 321.117 د.ك
بلغ اجمالي المصروفات من التعاملات مع الاطراف ذات الصلة مبلغ 3.997.962 د.ك
علما بان موافقة بنك الكويت للاوراق المالية على هذه البيانات كانت بتاريخ
ِ07-07-2010 .‏
ِ2) التوزيعات المقترحة:‏
أوصى مجلس ادارة الشركة بعدم توزيع اى ارباح عن السنه الماليه المنتهيه
في 31-12-2009 . علما بأن هذه التوصيه تخضع لموافقه الجمعيه العموميه ‏
والجهات المختصه .‏
علما بان تقرير مراقبي الحسابات يحتوي على التالي :-‏
ِ1- عدم التأكد المتعلق بالاستمرار على اساس مبدا الاستمرارية :‏
دون التحفظ في رأينا ، نلفت الانتباه الى الايضاح رقم 2 حول البيانات ‏
المالية المجمعة والذي يبين ان المجموعة تكبدت خسائر بمبلغ 77.175.466 د.ك
للسنة المنتهية في 31 ديسمبر 2009 ، وكان لدى المجموعة خسائر متراكمة ‏
بمبلغ 67.505.320 د.ك ، وكما في ذلك التاريخ تجاوزت المطلوبات المتداولة
للمجموعة موجوداتها المتداولة بمبلغ 225.892.585 د.ك . اضافة الى ذلك ، ‏
عجزت الشركة الام عن سداد التزامات دين مبلغ 78.065.913 د.ك وعلقت ‏
دفعات سداد المبالغ الاساسية لالتزامات الدين الى البنوك والمؤسسات المالية،
وهي تعمل بفاعلية مع الممولين لاعادة جدولة التزامات ديونها . ان هذه الظروف
مع الامور الاخرى المبينة في ايضاح 2 ، تشير الى وجود عدم تأكد مادي مما ‏
يمكن ان يثير شك كبير حول قدرة المجموعة على الاستمرار في اعمالها على ‏
اساس مبدأ الاستمرارية .‏
ِ2- الامور القانونية والرقابية الاخرى :‏
ووفقا للمادة رقم 171 من قانون الشركات التجارية ، حيث ان الشركة الام قد ‏
خسرت اكثر من ثلاثة ارباع رأس المال ، يجب على مجلس ادارة الشركة ‏
الام الدعوة الى عقد جمعية عمومية غير عادية لمناقشة خطط الشركة الام ‏
في المستقبل .‏

Global Investment House - National Bank of Umm AlQaiwain to Appeal

Following yesterday's announcement by Global Investment House that the Court of First Instance in Dubai had ruled in its favor over the long standing dispute between NBUQ and GIH over a US$250 million deposit, today NBUQ issued a press release on the ADX relating its side of the story and advising that it intends to appeal the judgment.

When NBUQ files its appeal, the judgment of the lower court will be stayed while the Appeals Court hears the case.  The party losing in the Appeals Court will have the right of a final appeal to the supreme court.

Aayan Leasing and Investment - 2009 Losses of KD73.2 Million

Aayan Leasing and Investment has reported its 2009 earnings and they are dismal:

1. A net loss for the year of KD77,175,466.
2. Accumulated losses of KD67,505,320
3. Current Liabilities exceed Current Assets by KD225,892,585
4. Default on KD78,065,913
5. Breach of Article 171 of the Commercial Companies Law = Loss of more than 75% of legal capital.

Not a pretty picture, but I suspect still prettier than what happens to creditors and shareholders.

AlGosaibi v Maan AlSanea - Abu Dhabi Commercial Bank Sues Saad for US$32 Million

Asa Fitch over at The National reports that ADCB has filed suit in London against Saad Trading and Contracting over a default on a currency swap of US$32 million.

There's really not much to add on top of what's in the article.

Global Investment House Wins Round #1 Against National Bank of Umm Qaiwain

GIH announced this morning that the Court of First Instance in Dubai had ruled in its favor against NBUQ ordering it to return GIH's US$250 million deposit plus interest and costs to GIH.

This is indeed good news for GIH.  Or perhaps more precisely for GIH's creditors.

As of 31 March 2009, NBUQ had roughly AED3.2 billion in cash and banks (roughly US$859 million).  Repayment to GIH would leave NBUQ will a net positive balance in interbanks to the tune of some AED1.7 billion or so.

But it's important to note that this is also just the Court of First Instance.  NBUQ has the right of appeal in which case implementation of the judgment will be suspended.

You can also read NBUQ's discussion of the law case (prior to this judgment) in Note 13 to its 31 March 2010 financials linked to above.

International Investment Group: Defaults on Sukuk 2009 Financials Released

Today Deutsche Trustee Company, Delegate on the IIG Funding Limited Sukuk, announced on NasdaqDubai two further defaults on 10 July 2010:

1. First, IIG Funding did not pay the July 2010 Periodic Distribution Amount ("PDA" or "interest").   As you'll recall, the April PDA of US$3,353,062.50 was missed.   Since the Sukuk has a fixed interest rate (6.75% p.a.), the July PDA is the same amount meaning IIG has not paid a total of US$6,706,125.00 in PDAs.
2. Second, IIG (the parent and ultimate borrower) did not honour its Purchase Undertaking in the amount of US$152,467,782.23 representing principal of US$147,490,000 plus 100% of the unpaid PDA of US$4,977,782.22 on these amounts.  That is, 74.2274% thereof.

What is interesting is that Certificateholders did not dissolve the Trust for the April non payment under Article 13.  Rather they chose to use the Put Option under Article 6.5.   See Offering Circular here.   

What that means is that IIG was only obligated to Purchase the interests of those investors who exercised the Put Option (which had a one time exercise date of 10 July 2010).  Only 74.2274%. voted to exerecise the Option.  Technically, the remaining 25.773% of principal is not past due.  Those Certificateholders are in effect in a subordinate state.  Not a particularly wise position to be in. 

Presumably, the Certificateholders will vote again on a Dissolution - thus accelerating the entire principal and ensuring they are all on the same legal footing.  A failure by IIG to honour its Purchase Undertaking is another Article 13 Event of Dissolution. 

Anyone out there who has an explanation for this approach - that is, not voting straight away for Dissolution and accelerating all the Certificates - please post.  This seems a very perplexing approach.  The prudent passenger does not stay below deck on the Titanic after it has collided with the iceberg.

IIG has advised that it is unable to make the payment and referred to its engagement of KPMG to help it devise a restructuring plan. 

I'll post separately about IIG's 2009 financials.  As you might expect, they are not "pretty".

AlGosaibi v Maan AlSanea - Saudi Court Rejects AHAB Suit Against AlSanea

AlQabas reports that the Saudi Administrative Court for the Eastern Province rejected a lawsuit raised by Ahmad Hamad AlGosaibi and Brothers Company ("AHAB") against Mr. Maan Al Sanea citing lack of jurisdiction and competence to hear the case.

In the case AHAB was seeking 43 million shares of SAMBA plus earnings thereon of some SAR1 billion (US$266.6 million) which it claims are in Mr. AlSanea's possession but which it asserts belong to it.