AL KHOBAR, Saudi Arabia,
July 24, 2016 /PRNewswire/ --
Coinciding events in the last week represent an historic milestone
in the efforts of Ahmad Hamad
Algosaibi & Brothers ("AHAB" or "The Company") to
resolve the largest and most complex financial dispute in the
history of the Middle East.
Historic Settlement Agreement
AHAB has long sought a comprehensive settlement with all
financial institutions that have claims against it
("Claimants"). In May 2014 the
Company initiated a comprehensive settlement process and invited
all Claimants – local and foreign – to participate. A
five-member Steering Committee was formed to negotiate with AHAB,
and the parties agreed detailed settlement terms, which were
presented to the wider Claimant group at a meeting on 28 January
2016.
As a further important step in formalizing this deal, AHAB has
signed today a settlement support agreement with the five Steering
Committee members. This agreement formally commits AHAB and
the Steering Committee members to support the implementation of the
previously agreed settlement terms.
The next step in the process is for other Claimants to sign the
Settlement Support Agreement. To date, AHAB has agreed with
other Claimants (representing 89.9% by number and 56.3% by value)
the amount of their claims and consented to their enforceability
against AHAB as part of the settlement process. Claimants will be
asked to sign the Settlement Support Agreement as soon as possible
over the coming weeks.
The process for resolving claims against AHAB was accelerated
recently with the appointment of a three-judge Joint Directorate of
Enforcement at the General Court in Al Khobar, Saudi Arabia ("JDEK"), which is authorized to
address claims against AHAB. The JDEK has publicly invited
Claimants to submit their claims against AHAB by 21st
July. In a further attempt to assist Claimants, AHAB has
recently requested an extension of this deadline.
AHAB intends, jointly with Claimants, to request that the JDEK
implements and administers the agreed settlement. AHAB
remains firmly of the view that the comprehensive settlement that
has been agreed is in the best interests of all
stakeholders. A lot of effort has gone into
negotiating the deal and it is designed to incentivize AHAB to
maximize returns to Claimants. It would also result in fair
treatment of all claims in accordance with Shariah principles of
equality and respect for the will of the majority. In
addition, the settlement protects livelihoods of employees, eases
administrative burdens and costs to the court and parties, and
preserves the economy of the Eastern Province and the reputation of
the Kingdom of Saudi Arabia in
international markets.
Asked about the development, Stephen
Jenkins of Arab Banking Corporation, a member of the
Steering Committee, said, "By signing the settlement support
agreement with AHAB, the five financial institutions that comprise
the Claimant Steering Committee have committed themselves to
support the deal on the agreed terms. The Steering Committee
remain of the view that this is the best solution to reach a
comprehensive agreement that maximizes recoveries for all
claimants. We now look to the full claimant group to do the
same."
Largest Trial in the History of the Cayman Islands
One of the most important components of the comprehensive
settlement is the anticipated upside to Claimants from any
recoveries that AHAB receives in the USD 7.3
billion legal case that it brought in the Grand Court of the
Cayman Islands. The trial in the
case began last week against seventeen (17) offshore shell
companies (now in liquidation) that AHAB alleges participated in
and benefitted from a massive fraud discovered in 2009. The
fraud resulted in losses of billions of dollars to AHAB and more
than 100 Claimants.
AHAB initially filed its case in 2009 to prevent those
responsible for the fraud from removing assets from the Cayman
companies before AHAB could seek damages through the courts –
damages that AHAB believes it will recover and that it will then
make available for distribution to Claimants as part of the
comprehensive settlement.
AHAB remains committed in its efforts to maximize recoveries
from litigation and is incentivised to do so by the terms of the
comprehensive settlement. AHAB is optimistic and determined
that it will prevail in its Cayman
Islands case and in defeating the counterclaim brought by
one of the liquidators, Grant
Thornton. AHAB has consistently and publicly stated
that the Cayman claims should be settled in order to speed up the
recovery to Claimants.
In discussing the litigation, AHAB's CEO, Simon Charlton, said: "AHAB is seeking to make
litigation recoveries that we will then return to Claimants through
the comprehensive settlement. This will give Claimants a
significantly greater recovery than would otherwise be available to
them without a settlement. This has long been AHAB's
objective and, while we are pleased with the progress that has been
achieved, we will continue working hard on all fronts until it is
completed."
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visit:http://www.prnewswire.com/news-releases/algosaibi-groups-signs-settlement-agreement-with-claimant-steering-committee-300303032.html
SOURCE Ahmad Hamad Algosaibi
& Brothers (AHAB)