RIYADH, Aug 24 (Reuters) - Saudi conglomerate Algosaibi on Monday said it would sue Dubai-based Mashreq bank in a New York court, alleging the lender of being 'wilfully blind' to irregular deals that helped lead Algosaibi into default.
Saudi firms Ahmad Hamad Algosaibi and Bros Co (AHAB) and Saad Group are restructuring combined debt worth up to an estimated $22 billion in one of the biggest blows yet in the global financial crisis, that has left dozens of banks exposed and threatened to dampen Saudi's economic recovery.
'These transactions have no legitimate commercial purpose,' AHAB's legal counsel Eric Lewis told reporters in a conference call before filing the suit in the New York State Supreme Court.
The suit follows Mashreq's $150 million suit filed earlier this year against Algosaibi, in a tit-for-tat case that looks increasingly likely to see the biggest corporate default ever in the Middle East battled out in U.S. courts.
The planned suit comes as the Algosaibi group
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