Big Four auditors KPMG and PricewaterhouseCoopers can shield documents sought by an investment fund for sprawling litigation related to the fall of two powerful Saudi conglomerates in 2009, the Second Circuit ruled.
The ruling deprives the New York-based firm Fortress Investment Group of ammunition it wanted for legal battles in England, Bahrain, the Cayman Islands and Saudi Arabia as the fallout of 6-year-old scandal still sizzles.
Fortress’ funds held roughly $380 million in interests in two Saudi conglomerates once worth several billions of dollars: the Saad Group and Ahmad Hamad Algosaibi & Brothers (AHAB) Co.
The largest of these interests included a $129 million interest representing a 20 percent stake in Saad’s Golden Belt sukuk, the Arabic word for a corporate bond compliant with Islamic law.
In 2009, Saad’s billionaire owner Maan Al Sanea was accused of a colossal fraud and embezzlement scandal that was discovered after AHAB reported financial problems leading to its default.
This set off “one of the largest corporate collapses of the credit crunch and the messiest of the numerous debt crises to afflict family conglomerates in the Middle East,” The Economist reported earlier this year.
The “Saudi saga,” in the magazine’s words, continues to inspire global litigation that remains “little noticed by the international media.”