BNP Paribas is being sued by the trustee of a $650m Islamic finance transaction who said the deal was rendered worthless because the bank didn’t get a proper signature from the Saudi businessman behind the deal: Saad Group Chairman Maan al-Sanea.
Bloomberg News reports that Golden Belt 1 Sukuk sued the bank in a London court for negligence and breach of contract during its role as arranger, manager and sole bookrunner for the 2007 Shariah-compliant lending deal.
When Saad defaulted in 2009, it became clear that the transaction wasn’t properly executed under Saudi law because the paperwork didn’t have a 'wet-ink' signature from al-Sanea, Golden Belt said in documents filed in September and made available last week. Because of the error, legal proceedings in Saudi Arabia are 'unlikely to provide any remedy' and BNP Paribas should pay for its losses, Golden Belt said.
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