On the first day of an auction of vehicles seized from a beleaguered Saudi tycoon, thousands of people attended the sale of vehicles which officials said will go toward repaying about SR18 billion owed to the tycoon’s creditors.
Auctioning the vehicles of indebted Maan Al-Sanea, a Saudi Arabian tycoon, goes to show improvements in the kingdom’s corporate governance structures and by extension Crown Prince Mohammed bin Salman’s commitment to economic reforms.
Creditors ranging from local and international banks to workers hope the process will lead to repayment of some of the debts owed to them by the business magnate’s company, the Saad Group.
Maan Al-Sanea was in 2007 ranked by Forbes as one of the world’s 100 richest people. He was however apprehended by authorities last year for unpaid debts dating back to 2009 when his company evaded payments in what was Saudi Arabia’s biggest financial meltdown.
His case is however different from the dozens of Saudi businessmen and conspicuous figures who were arrested last November in a corruption crackdown.
The 1st phase of the auction was launched this week, with around 900 vehicles including buses, Lorries, golf carts, diggers and forklift trucks owned by his company up for sale.
Head of Etqaan Alliance, a coalition of companies including two real estate companies, lawyers and accountants, Abdulaziz Al-Rashid said that the later stages of the process will include his personal wealth and other parts of his business, which is estimated at around SR10.3 billion.
Other belongings up for sale include ceramics, furniture and machinery expected to be auctioned off in the Eastern Province where much of his businesses were based as well as in Riyadh, Yanbu and Jeddah.
Al-Rashid added that this auction gives a clear message that the Saudi courts are serious in carry out the process of liquidation of all defaulters’ assets to repay their creditors. He said that they anticipate concluding the liquidation of all the assets belonging to Al-Sanea during this calendar year 2018.
By April the first phase of the auction is expected to be completed, and the money raised will go toward repaying creditors owed around SR18 billion.
Some of those attending the event were some of the workers who hope to get paid through the liquidation process.
Reuters reported last week that advisers to Saad Group had recently asked some bank creditors to meet in Dubai in a bid to try to reach a consensual debt settlement on SR16 billion owed to creditors.
The advisers were in search of a deal before Saudi authorities make advancement in the process of the auction. However, that fund raising drive did not pan out.