Banks’ lawsuits aimed at Saudi debtors

At least four banks have launched lawsuits to recover debts allegedly owed to them by two warring prominent Saudi Arabian companies hit by financial problems, in a move that has shocked investors in the oil-rich Gulf.

Three claims have been filed at the High Court in London since last month against businesses from the Saad and Algosaibi conglomerates, suggesting some financial institutions are taking matters into their own hands even as the Saudi companies grapple to restructure their large debts.

News of the cases, which comes after the emergence of a US lawsuit brought by the Algosaibi group over an alleged “massive fraud” of up to $10bn by Maan Al Sanea, Saad’s billionaire owner, is likely to add to concerns about international and regional bank exposure to Gulf companies.