Gosaibi takes Dubai's Mashreq to U.S. court

Saudi conglomerate Al-Gosaibi on Monday said it would sue Dubai-based Mashreq bank in a New York court, alleging the lender of being "wilfully blind" to irregular deals that helped lead Al-Gosaibi into default.

Saudi firms Ahmad Hamad Al-Gosaibi and Bros Co and Saad Group are restructuring combined debt worth up to an estimated $22 billion in one of the biggest blows yet in the global financial crisis, that has left dozens of banks exposed and threatened to dampen Saudi's economic recovery.

"These transactions have no legitimate commercial purpose," AHAB's legal counsel Eric Lewis told reporters in a conference call before filing the suit in the New York State Supreme Court.