RIYADH, (Reuters) – Maan al-Sanea, the owner of Saudi-based private conglomerate Saad Group, reduced his stake in Samba Financial Group 1090.SE by at least 2.8 percentage points on Wednesday, stock exchange data showed.
Before Wednesday’s close Tadawul data showed that Sanea held a 7.8 percent stake in Samba, which is the country`s second biggest lender by market value. After Wednesday’s close Sanea’s name did not appear on the list of Samba shareholders holding stakes of 5 percent or more.
The reduction of Sanea’s stake in Samba follows a report on Wednesday by Dubai-based al-Arabiya television channel which quoted unidentified sources as saying that he had reached a settlement over debt owed to Saudi lenders.
It was not immediately clear if the apparent reduction of Sanea’s stake in Samba was linked to the reported agreement with local banks.
On Sunday Samba said that Saud Algosaibi, managing director of Ahmad Hamad Algosaibi and Bros Co (AHAB), was no longer its chairman and had left the board.
AHAB is suing Sanea in a case involving allegations of $10 billion in financial irregularities, a legal battle that reached U.S. courts and raised questions about Saudi banks’ lending practices.
Sanea, who also recently owned about 3 percent of HSBC, sold earlier this year stakes in UK-based homebuilder Berkeley Group Holdings Plc and in 3i Infrastructure Plc after his Saad Group and AHAB unveiled massive debt defaults.
A Saad spokesman could not immediately be reached for comment.
Some bankers say the total cost of writedowns from Saad and AHAB may hit $22 billion and affect 120 banks.
Numerous regional and international banks including Citigroup and BNP Paribas are exposed to the two conglomerates.
Standard Chartered has estimated Saudi banks’ exposure to the two groups to be $5 billion.
The problems at the two groups came to light in late May when the central bank froze Sanea’s accounts and later proceeded with a similar move on accounts related to AHAB owners, according to bankers.
The Tadawul data also showed that on Wednesday the state-owned Public Pension Agency (PPA), the kingdom`s second largest pension fund by assets, raised its stake in Samba by 2.6 percentage points to 15 percent.
The stakes of the other listed Samba shareholders, the Public Investment Fund (PIF) and the General Organization for Social Insurance (GOSI) remained unchanged at respectively 22.9 and 11.4 percent.
Tadawul did not disclose details about Wednesday’s transactions on Samba. Stakes below 5 percent are not liable for ownership disclosure in Saudi Arabia.
According to its website, a transaction does not get disclosed to the public when a large sale order receives a price based on prevailing market conditions.