Al Ahli Bank of Kuwait (ABK) has filed a complaint against Saudi billionaire Maan Al Sanea and Saad Trading Contracting and Financial Services for alleged breach of contract and fraud.

Kuwait's fourth biggest listed lender by market value is seeking US$125 million in compensation and claims that the beleaguered Saudi group used false documents to obtain letters of credit (L/Cs).

Concealment

AKB filed its complaint in September in New York. It alleges that Saad broke conditions of a banking facilities agreement by concealing several material facts and circumstances regarding the group's financial position.

According to the Kuwaiti bank, this included hiding simultaneous borrowings of perhaps billions of US dollars from several banks.

L/C loans

The alleged fraud relates to money loaned via L/Cs to Saad by AKB to purchase building materials for Saad Construction business.

According to the bank, the defendants presented false paperwork for four L/Cs, saying they were to be used to purchase building materials.

In reality, the funds were routed to the defendants for unauthorised purposes having nothing to do with building materials.

The parties

ABK is seeking US$25 million for breach of contract and US$100 million in damages for the alleged fraud.

Saad Group, up until this year one of Saudi Arabia's most prestigious conglomerates, is now in talks with creditors after it started struggling to repay its debts earlier this year.

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