AHAB Responds to Sonecon’s Report and Teleconference on “The Importance of International Standards in Managing Defaults in Islamic Finance”

– Paid Media Stunt to Attack Saudi Regulators; Financial Backers of the Report Are Unknown

WASHINGTON, May 21, 2013 /PRNewswire – Sonecon and DCI Group (both Washington D.C.-based firms) have been hired by a mystery client to write and publicize a report that admonishes the government of Saudi Arabia and the manner in which it has dealt with the Saad and Algosaibi dispute and settlements.

The PR firm DCI Group recently announced a May 22nd “Media Teleconference,” which is described as “A special look at Saudi Arabia and the unsettled debt of the Saad and Algosaibi Groups.” The teleconference will feature Dr. Robert Shapiro of Sonecon as he releases his report on the matter.

While it is impossible to know the full contents of the report, based on past actions, it seems likely that it will lump Saad and AHAB together, and fail to acknowledge any of the negligent due diligence procedures from the groups’ creditors.  DCI Group has been careful to not mention AHAB in the most recent announcement (other than the title), because they were forced to cancel a similar teleconference earlier this year.

The teleconference was originally scheduled for February 26 and because of extensive inaccuracies in the announcement, they were forced to postpone.  In the following weeks, they placed an opinion piece on Forbes.com, which quickly removed the article once the site’s editors realized the glaring inaccuracies. (The author of that article, Brian Sturgess, was slated as a second participant on the Feb. 26 call, but he appears to have been removed from the event after having his piece discredited.)

In DCI Group’s teleconference announcement, they tweaked their language just enough to remove glaring inaccuracies.  For example, they changed one sentence as follows:

Original (FEB) – “The Saudi Government helped negotiate an agreement for some of the [Saad/AHAB] claims in a workout process that grants priority to Saudi creditors, and thus violates all international best practices for financial regulation.”
Revised (MAY) – “The Saudi Government appears to have helped to negotiate an agreement between the Saad Group and its local creditors, but many foreign holders of Saad Group debt have received virtually no information, much less offers, about the disposition of their loans to the Group.”

DCI Group also removed the term “Crony Capitalism” from their announcement, but will surely speak to it on the teleconference. In respect to AHAB, that is absurd as there has been no special treatment by the Saudi or any other government.

Ultimately, we see this effort as an attempt by one or more international creditors to distort the history of this dispute.  In 2009, AHAB made a significant settlement offer to which the banks scoffed.  Since then, they have spent their time and money litigating and trying to leap frog one another in line for settlement dollars.  If they had instead worked together and with AHAB to reach a reasonable conclusion, everyone involved would be in a better place right now.  Instead, they now find themselves funding phony reports such as the one to be released on Wednesday.

CONTACT:  For more information you may contact AHAB’s global legal coordinators at Lewis Baach PLLC. Please send requests to Graham Miller at graham@sphereconsulting.com, +1-202-862-5522

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