Saudi firm sues Barclays for $10bn


City Staff
Thursday 30 October 2014 02:07

A property company controlled by one of Saudi Arabia’s richest men, Sheikh Mohamed bin Issa al Jaber, is suing Barclays for $10bn (£6bn).

The company alleges that Barclays stopped pursuing lease payments on military complexes from the Saudi government so the bank could get a lucrative banking licence to operate in the kingdom.

A lawsuit filed in New York State Supreme Court by Jadawel International, a divison of London-based MBI International Holdings, alleges Barclays “hatched a fraudulent scheme” to secure the coveted Saudi banking licence, Reuters reported.

The lawsuit is seeking damages of at least $10bn for Barclays’ alleged breach of fiduciary duty, fraud and interference.

MBI, founded by the Sheikh, built two compounds and leased them to the Saudi government in 1999 to house American defence contractors, the lawsuit said, and payments should have amounted to more than $2bn through 2017, it claimed.

When Jadawel tried to refinance in 2001, Barclays helped to find a group of lenders, according to the lawsuit. When the Saudi government partially defaulted in 2002, Barclays took on the responsibility to collect, the lawsuit claims.

A lawsuit was filed seeking damages from Saudi Arabia, but Barclays later caused it to be withdrawn, the new complaint alleges. “Barclays believes the claim is without foundation and will vigorously defend it,” the bank said.

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