SAMBA closes Bin Mahfouz account

Saudi American Bank (SAMBA), the second largest bank in Saudi Arabia closed the bank account of Khaled bin Mahfouz, the second son of Salem Bin Mahfouz, founder and former chief executive of National Commercial Bank, the largest bank in Saudi Arabia.

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By  Massoud Derhally Published  August 25, 2003

Saudi American Bank (SAMBA), the second largest bank in Saudi Arabia closed the bank account of Khaled bin Mahfouz, the second son of Salem Bin Mahfouz, founder and former chief executive of National Commercial Bank, the largest bank in Saudi Arabia.

The bank closed Bin Mahfouz’s account in July without giving him prior notice according to Asharq Al Awsat (24 August).

Bin Mahfouz told the London based daily when he tried to inquire about the reasoning behind the decision, he was told by bank employees simply that orders came from New York, without giving any specific indication from whom.

Bin Mahfouz went on to tell the daily that the Saudi Arabian Monetary Agency (SAMA) was aware of the decision to close his account, but that he was surprised that as regulator of the financial sector it did not interject as closure of accounts was under its mandate.

Relatives of the September 11 terrorist attacks accused the Khalid bin Mahfouz family as being benefactors of Osama bin Laden, an accusation they have vehemently denied and which they says is “unsubstantiated innuendo and inaccurate reporting.”

In 1997, Khalid Bin Mahfouz sold a 20.7% stake in NCB to a group of private investors in order to facilitate the transition of the bank on 1st July that year from an unlimited liability private partnership to an incorporated public limited company. In 1999, a further 50% of the family's holding was sold to the Saudi Public Ownership Fund and in late 2002; the family sold its remaining stake to the same fund.

The Saudi government is expected to sell 50% of its stake in NCB in 2004.

Khalid Bin Mahfouz and his immediate family have business interests in the Middle East, Asia, Latin America, Europe, and the Far East. The group’s real estate portfolio focuses on office and residential properties in Saudi Arabia, UAE, Asia Pacific and Europe. It also holds an interest in Thuraya Satellite Telecommunications Company in the UAE.

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