The Central Bank of Bahrain has appointed two British law firms to administer a pair of Bahraini banks owned by the struggling Saudi Arabian conglomerates the Saad and Al Gosaibi groups.
From today, Trowers and Hamlins will lead the administration of The International Banking Corporation (TIBC) while Charles Russell will administer Awal Bank, the central bank said.
The central bank assumed the administration last month of Awal Bank, which is owned by the Saad Group, and TIBC, which is owned by Ahmad Hamad Al Gosaibi and Brothers.
The financial troubles of the two Saudi family conglomerates arose in May, when TIBC defaulted on its financial obligations to other banks because of a planned debt restructuring by Al Gosaibi, whose operations include financial services, property, hotels and shipping. Saad’s problems came to light shortly afterwards when it emerged that the group was also being forced to restructure its debt.
The central bank took control of both companies on July 30, saying a report that it commissioned had uncovered substantial shortfalls of assets compared to liabilities. It said it had decided to appoint law firms to lead the administration proceedings because of the number of legal cases involving both banks.
A leading accountancy firm would be working alongside the administrators to ensure the interests of creditors were upheld, the central bank said.
The administrators will be instructed to identify any outstanding claims of creditors and to manage the distribution of the remaining assets of the banks, the regulator said