The default on billions of dollars of loans by Ahmad Hamad Algosaibi and Brothers in 2009 was just the beginning of the problems for the Saudi conglomerate, but its impact on investor confidence in the Gulf would be no less pronounced.
For years, the company - which held stakes in Saudi British Bank as well as rights to bottle Pepsi in Saudi Arabia - seemed like a stable, solid investment with a bottom line boosted by rising oil prices and a booming Saudi economy. As a result, the fall of Al Ghosaibi not only shook investors in Saudi Arabia, but across the Gulf.
"On paper it may be one of the best companies [out there], but you can never control it. These companies from the outside look like they are growing — and they are growing —but you never know internally what is going on behind the curtains," said Charbel Azzi, head of client coverage for the Middle East and Africa at S&P Indices and a former banker with Standard Chartered.
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