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Sat, 24 Nov 2001, 9:44pm HKT

Saudi Arabia Closes Bank Accounts as Part of Inquiry

Riyadh, Nov. 22 (Bloomberg) -- Saudi Arabia has closed bank accounts tied to some of the 66 people and organizations the U.S. says are linked to the Sept. 11 attacks on the U.S., said David Hodgkinson, managing director of Saudi British Bank, the No. 5 Saudi bank.

Hodgkinson would not give details or say whether any of the accounts were at Saudi British, which is 40 percent owned by HSBC Holdings Plc. While U.S. officials have said Saudi Arabia is cooperating with the inquiry into financing sources for Osama bin Laden and his al-Qaeda network, this is the first indication specific accounts have been frozen or closed.

U.S. Secretary of State Colin Powell said last month of the Saudi monarchy: ``Everything we have asked them to do they have done.'' However, Saudi Arabia's interior minister, Prince Nayef bin Abdul Aziz, said in mid-October that his country will only review accounts if there's a clear connection to bin Laden and al- Qaeda, according to the official Saudi Press Agency.

The Saudi Arabian Monetary Agency, which circulated the two lists to banks, would not comment. A Western diplomat who declined to be identified confirmed the Saudis have shut ``some'' accounts in response to the U.S. lists.

Saudi Arabia hasn't circulated a third list of 22 names the U.S. issued earlier this month that targeted groups with weak or no links to al-Qaeda, such as Lebanese Hezbollah, or militant Palestinian organizations Hamas and Islamic Jihad, the diplomat said.

Minority Stake

Fifteen of the 19 hijackers who crashed planes into the World Trade Center and the Pentagon carried Saudi passports, according to the Federal Bureau of Investigation. Bin Laden, the prime suspect in the attacks, was a Saudi citizen until the kingdom revoked his passport in 1994.

HSBC is not the only Western bank with a minority share in a Saudi bank. Citigroup Inc., Credit Agricole, ABN Amro Holding NV and others own minority stakes in half the kingdom's banks, giving them a degree of control over 44 percent of the country's bank assets.

They say their Saudi affiliates all are cooperating with the investigation. ABN Amro, the No. 1 Dutch bank, ordered its Saudi associate to search records for 1,500 people and groups possibly linked to funding the attacks.

``We are cooperating fully with the regulatory authorities in trying to identify these funds,'' said Ali Shihabi, a member of the board of Saudi Hollandi Bank, in which ABN Amro has a 40 percent stake. ``To be honest, though, the amounts involved are small and difficult to spot as they may be totally legitimate.''


Each of the mother companies has signed renewable 5-year management contracts with their majority Saudi partners allowing them to put their own people into top management positions, including that of chief executive.

Citigroup owns 23 percent of Saudi American Bank, the second- largest Saudi bank, known as Samba. ``Samba follows the same anti- money laundering rules as Citi, but it also complies with local (Saudi Arabian Monetary Agency) regulations,'' said Andrea Hurst, a spokeswoman for Citigroup.

Spokespeople for minority owners of other Saudi banks -- J.P. Morgan Chase & Co., and Credit Agricole didn't respond to requests for comment on policies at Saudi affiliates.

Credit Agricole, France's biggest unlisted bank, owns 31 percent of Al Bank Al Saudi Al Fransi, the sixth-largest Saudi bank. J.P. Morgan Chase, the second-largest U.S. bank, owns 7.5 percent of Saudi Investment Bank, the country's No. 9 bank, which in turn owns 50 percent of American Express (Saudi Arabia) Ltd., according to Bankers' Almanac.

The affiliates of Western banks hold $53 billion of the kingdom's $121.6 billion assets, according to Bankers' Almanac.

Source: 2001 Bloomberg L.P. All rights reserved.


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