Saudi Arabia's central bank governor said local banks haven't settled the debts of the troubled conglomerate Saad Group, a deal which was widely reported and sparked controversy for leaving foreign lenders to fend for themselves in international courts, according to comments published Saturday in the Riyadh-based daily Al Eqtisadiah.
When asked to respond to criticism from foreign lenders over the 9.7 billion Saudi riyals ($2.59 billion) settlement of outstanding loans with local banks, Mohammed Al Jasser, governor of the Saudi Arabian Monetary Agency, or SAMA, said local lenders applied assets that were pledged by Saad Group to obtain the original loans, in a "setoff" transaction which is the legal right of the banks.
"The problem still is there for the rest of the loans for local and foreign banks, and there has been no settlement as far as we know," he said. Foreign banks used the same process to seize these types of assets, he added.
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