BANKS FILE SUIT AGAINST SAUDI COMPANY
Four international banks have filed
claims for 131.2 mln riyals against the owners of Saudi
construction and trading group Abdulla Fouad and Sons Co,
bankers and lawyers in the Kingdom said.
    Bankers said the suit may prove to be a test case for banks
which have so far been largely frustrated in their attempts to
reclaim loans through the Saudi Arabian legal system.
    Citibank N.A., Bank of America NT and SA, Arab Banking Corp
(ABC) and the Bank of Bahrain and Kuwait (BBK) filed claims
with a special Saudi court under the jurisdiction of the
Ministry of Commerce on March 7.
    A hearing at the Dammam court, the Negotiable Instruments
Committee, has been set for April 19.
    A company spokesman declined comment.
    The company was hit by the decline in Saudi Arabia's
economy but chairman Abdulla Fouad arranged to settle debts
with Saudi bank creditors by ceding them a hospital, shares and
an office building, bankers said.
    The four non-Saudi banks, however, decided to press their
claims in the court.
    The bankers and lawyers said claims are based on promissory
notes signed by the limited liability company and backed by
personal guarantees signed by Abdulla Fouad, his two wives and
his sons and daughters.
    The claims are for a 34.2 mln riyal loan from ABC, a 42 mln
riyal syndicated loan led by Bank of America and including BBK
and two loans of 15 mln riyals and 40 mln signed from Citibank.
    The loans were signed between july 1984 and january 1985.
  REUTER
