Saudi family groups feel the pain

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It wasn't supposed to be this way. Ahmad Hamad Algosaibi & Brothers Company is one of the oldest and most respected family-owned conglomerates in Saudi Arabia. It was a group that could borrow on reputation alone, with a son of its founder on Forbes' world rich list.

But since one of its wholly owned subsidiaries, The International Banking Corporation (TIBC), defaulted on financial obligations to other banks this month it has sent jitters across the market.

The Algosaibi group has not responded to several requests for comment. But the fact that one of its subsidiaries defaulted has raised broader questions about the state of the oil-rich Gulf's secretive family-run businesses as they grapple with the downturn. The concern is that some may have overextended during the boom years, which saw Gulf states accumulate huge petrodollar reserves and fuelled rapid expansion, and are beginning to pay the price.