Recent reports that the Saad Group owned by Maan Al Sanea has reached some sort of debt settlement with Saudi banks is a matter of hope, but also of concern for international banks.
The fact that one of the parties in the massive dispute between two Saudi family groups is now beginning to reach some settlement on their debt is of course encouraging, as the dispute has cast a shadow on bank relationships with family-owned businesses and caused uncertainty in the vital financial sector of regional economies.
However, the reports that only Saudi banks were participating, to the tune of about 3.1 billion riyals (Dh3.03bn) is worrisome, especially for foreign banks who are reportedly owed billions of dollars. While all banks have to bear the consequences of their folly in extending loans on a name-only basis, without a deeper scrutiny on the activities of such Gulf family businesses, the fact is that a level playing field has to be established for all parties involved in financial disputes, without favouring national institutions.
This is what the US Federal Reserve did when it froze all outstanding settlement contracts when Lehman Brothers went bankrupt and a Fed settlement committee unwound Lehman's obligations, irrespective of their origin or ownership.
It is not hard to assume that the two Saudi family businesses at the heart of the dispute, Al Gosaibi and Saad, might also be tempted to cut a settlement deal with banks nearer to home, specifically those from GCC countries. The fact that other Gulf regulators noted that their domestic banks were not part of the settlement provides some comfort that no such deals were cut. The consequences of doing such backyard deals have long-term negative consequences to the region.
Globalisation comes with both benefits and costs. In the Gulf, we often cite a long list of perceived benefits: mobility of ideas and capital; unrestricted trade flows; the ability to attract investment; and ensuring a level playing field for developing nations striving to diversify their narrow resource based economies. And the world expects the same from the Gulf.
There cannot be two sets rules at the same time - a globalised one when it suits us and a closed, nationalistic one when we want to protect ourselves.
It could just be that the Saudi banks managed to cover themselves by having Saudi based collateral against their loans. From the dribs and drabs of information emerging, it does seem that Mr al Sanei's personal obligations were secured against local bank shares which is perfectly acceptable to international banks if this would be communicated more openly by the banks concerned.
The problem lies with loans extended to the Saad corporates and what type of collateral they provided and if this collateral is somehow also pledged to the offshore entities that borrowed from international banks leaving them now exposed.
Banks generally tend to follow each other in they extend loans to key clients, based on the simple promise that if they don't, then they lose out on the deal. In retrospect, many will be reassess how they deal with family businesses in the future and the quality of information that needs to be released by them. But for the time being, foreign banks are willing to absorb loan losses as long as all are treated the same. To argue that international banks with their larger capital bases and balance sheets can somehow "afford" to take greater hits compared to their smaller Saudi or Gulf counterparts is not an argument.
Not adopting a level playing field policy and see it enforced by the GCC financial regulators, could come back to haunt the Gulf in the long run. Many GCC countries have aspired to establish international standard financial centres, hoping to attract the big boys of the financial world. There could be nothing worse than sending the world a message that you are welcome to invest and lend to national economies, but that a blind eye will be turned when there is discrimination between national and international banks.
This is different from the so-called "too big to fail" syndrome, where national governments act, and have acted in the recent crises all around the world, to protect their key financial institutions to avoid panic and contagion to the wider financial sector. The Gulf did it. The Western world did it, as well.
For international bank creditors there are several options. First they can argue quietly, firmly and persuasively with the local Gulf financial regulators that having local settlements to the exclusion of international or "foreign" banks, is detrimental to these countries in the long run when these turn to the international capital markets to fund their mega projects.
A second option is to take the hit and lay low to avoid raising their profile. Another option, especially for those who have no physical presence or attachment to the Gulf, might be to go after the assets of the local banks who have reached bilateral settlements on the premise that their loans are pari-passu as the domestic banks and loan covenants have been breached.
This is a last option of the desperate and the only winners will be lawyers and financial forensic investigators. The domestic banks which reportedly are making such bilateral deals might consider themselves lucky in the short run, but they will sour their relations with international banks in the long run when they call them to participate in local mandates in the future.
Financial trust is an intangible commodity. After so many years of building up trust in the Gulf, let us now risk it for the sake of a few bilateral deals as the consequences could cost the region more.
To its credit the Saudi Arabian Monetary Authority has announced that it was not involved in any local settlement. And while welcoming any such settlements, it pointedly noted that the Saad accounts were still frozen.
Such announcements need to be more proactive and clear the air without having rumours take over and become de facto truths when the settlements already made could very well be perfectly legitimate.
Dr Mohamed A Ramady is a former banker and a visiting associate professor, Finance and Economics Department at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
The team
Photographer: Mateusz Stefanowski at Art Factory
Videographer: Jear Valasquez
Fashion director: Sarah Maisey
Make-up: Gulum Erzincan at Art Factory
Model: Randa at Art Factory Videographer’s assistant: Zanong Magat
Photographer’s assistant: Sophia Shlykova
With thanks to Jubail Mangrove Park, Jubail Island, Abu Dhabi
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
2020 Oscars winners: in numbers
- Parasite – 4
- 1917– 3
- Ford v Ferrari – 2
- Joker – 2
- Once Upon a Time ... in Hollywood – 2
- American Factory – 1
- Bombshell – 1
- Hair Love – 1
- Jojo Rabbit – 1
- Judy – 1
- Little Women – 1
- Learning to Skateboard in a Warzone (If You're a Girl) – 1
- Marriage Story – 1
- Rocketman – 1
- The Neighbors' Window – 1
- Toy Story 4 – 1
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BIOSAFETY LABS SECURITY LEVELS
Biosafety Level 1
The lowest safety level. These labs work with viruses that are minimal risk to humans.
Hand washing is required on entry and exit and potentially infectious material decontaminated with bleach before thrown away.
Must have a lock. Access limited. Lab does not need to be isolated from other buildings.
Used as teaching spaces.
Study microorganisms such as Staphylococcus which causes food poisoning.
Biosafety Level 2
These labs deal with pathogens that can be harmful to people and the environment such as Hepatitis, HIV and salmonella.
Working in Level 2 requires special training in handling pathogenic agents.
Extra safety and security precautions are taken in addition to those at Level 1
Biosafety Level 3
These labs contain material that can be lethal if inhaled. This includes SARS coronavirus, MERS, and yellow fever.
Significant extra precautions are taken with staff given specific immunisations when dealing with certain diseases.
Infectious material is examined in a biological safety cabinet.
Personnel must wear protective gowns that must be discarded or decontaminated after use.
Strict safety and handling procedures are in place. There must be double entrances to the building and they must contain self-closing doors to reduce risk of pathogen aerosols escaping.
Windows must be sealed. Air from must be filtered before it can be recirculated.
Biosafety Level 4
The highest level for biosafety precautions. Scientist work with highly dangerous diseases that have no vaccine or cure.
All material must be decontaminated.
Personnel must wear a positive pressure suit for protection. On leaving the lab this must pass through decontamination shower before they have a personal shower.
Entry is severely restricted to trained and authorised personnel. All entries are recorded.
Entrance must be via airlocks.
LAST-16 FIXTURES
Sunday, January 20
3pm: Jordan v Vietnam at Al Maktoum Stadium, Dubai
6pm: Thailand v China at Hazza bin Zayed Stadium, Al Ain
9pm: Iran v Oman at Mohamed bin Zayed Stadium, Abu Dhabi
Monday, January 21
3pm: Japan v Saudi Arabia at Sharjah Stadium
6pm: Australia v Uzbekistan at Khalifa bin Zayed Stadium, Al Ain
9pm: UAE v Kyrgyzstan at Zayed Sports City Stadium, Abu Dhabi
Tuesday, January 22
5pm: South Korea v Bahrain at Rashid Stadium, Dubai
8pm: Qatar v Iraq at Al Nahyan Stadium, Abu Dhabi