Four global banks have been ordered to hand over thousands of potentially incriminating documents in an ongoing legal battle between Saudi’s Maan Al-Sanea and the Algosaibi family.
A New York court told HSBC, Standard Chartered, Citi and Bank of America to release papers relating to bank accounts held by Al-Sanea, despite the banks’ pleadings the evidence could be used against them, UK newspaper The Telegraph reported on Sunday.
The four banks, which handled more than $1 trillion of money linked to the Algosaibi family, had argued the information could be used to bring cases against them, the paper reported.
Judge Jed Rakoff said the documents could raise questions over whether the banks had taken “reasonable steps to ascertain who their customer was.”
The court ruling is the latest in a global legal saga between Al-Sanea and his in-laws, the Algosaibi family. The rift in the clan, which has left some of the world's biggest banks nursing billions of dollars of losses, followed the collapse of the Algosaibi financial empire in the wake of the credit crisis.
Units of the conglomerate and Al-Sanea’s Saad Group, both based in the Saudi oil city of Al-Khobar, defaulted in 2009 after borrowing about $15.7bn from more than 80 banks.
The Algosaibi family's Ahmad Hamad Algosaibi & Brothers partnership denied liability for ensuing claims from creditors, blaming Al-Sanea of setting up a giant scam to defraud them.
The dispute led to court cases being pursued in London, the Cayman Islands, Switzerland and Saudi Arabia.
AHAB in June conceded a $250m lawsuit filed in London by HSBC and four other banks, after deciding the judge would likely find the company hadn’t done enough to prevent the fraud it alleges were behind the loans.
In June, a UK court lifted a freezing order on $9.2bn worth of Al-Sanea’s assets in what his legal team called a “significant turning point” in the court battle. A similar order was issued in May by a Cayman court, leaving Al-Sanea free to claim legal costs and damages from the Algosaibis.
Al-Sanea has denied the allegations against him.