Trowers & Hamlins appointed by the Central Bank of Bahrain as external administrator of The International Banking Corporation B.S.C.(c) (in administration) has filed a US$1.9 billion law suit against Ahmad Hamad Al Gosaibi & Brothers (AHAB) in relation to the deliberate misappropriation of funds raised through the creation of a fraudulent loan book which was at the heart of TIBC's operations.
The TIBC Loan Book enabled AHAB to raise enormous sums which it used to trade for its own account. The claim was filed at the Bahrain Chamber of Dispute Resolution (BCDR) and names AHAB itself along with each of its individual partners as defendants.
Trowers & Hamlins, the international law firm appointed by the Central Bank of Bahrain as external administrator of The International Banking Corporation B.S.C.(c) (in administration) has filed a US$1.9 billion law suit against Ahmad Hamad Al Gosaibi & Brothers (AHAB) in relation to the deliberate misappropriation of funds raised through the creation of a fraudulent loan book which was at the heart of TIBC's operations. The TIBC Loan Book enabled AHAB to raise enormous sums which it used to trade for its own account. The claim was filed at the Bahrain Chamber of Dispute Resolution (BCDR) and names AHAB itself along with each of its individual partners as defendants.
The claim filed on 7 May 2014 forms part of a wider asset recovery strategy being implemented by Trowers & Hamlins, assisted by independent corporate advisory and restructuring firm, Zolfo Cooper, to recover assets for the benefit of TIBC's creditors. The US$1.9 billion claim is the latest in a series of actions brought by the external administrator of TIBC against AHAB, which includes a US$430 million claim in respect of listed securities which AHAB used to capitalise the bank, as well as a US$720 million claim in respect of a series of FX trades undertaken by TIBC on behalf of AHAB and on which AHAB defaulted. Both the share claim and the FX claim have been brought before the courts of the Saudi Arabian Capital Markets Authority and Saudi Arabian Monetary Authority. This brings the total amount of litigation against AHAB commenced by the external administrator of TIBC to over US$3 billion.
Abdullah Mutawi, the partner at Trowers & Hamlins leading the asset recovery programme, said: “The case we have launched at the BCDR today is the most substantial claim to date that we have made on behalf of TIBC against its parent AHAB. It follows a painstaking forensic analysis of the TIBC loan book, the fraudulent means by which it was created and operated and precise mapping of the flow of funds over several years. We were greatly assisted in this task by a US Bankruptcy Court order requiring AHAB and its bankers (Bank of America in New York) to disclose banking records which has given us a deep insight into AHAB's receipt of, and control over, billions of dollars in remittances from TIBC to AHAB's bank accounts.
“As we have indicated before, AHAB is the single biggest debtor of TIBC, owing US$3.2 billion. We remain determined to continue with our strategy of seeking recourse against TIBC's material debtors, including AHAB and others, with a view to realising TIBC's assets for the benefit of all its creditors, which include international and regional banks owed in the order of US$2.6 billion.”
TIBC was placed into administration in July 2009 and Trowers & Hamlins was appointed as external administrator on 10 August, 2009. TIBC is a wholesale bank and is majority-owned by AHAB.
The Trowers & Hamlins team was led by Lucas Pitts with assistance from Abdullah Mutawi, Nesreen Osman, Cate Barbour and Nadya Rouben.
