March 7, 2011, 1:38 p.m.

http://www.latimes.com/news/nationworld/nation/wire/sns-bc-ml--bahrain-moneylaundering,0,4064782.story

CAIRO (AP) — Bahraini authorities have referred to criminal court several executives with two Bahraini banks controlled by two Saudi conglomerates, after the bank officials were accused of financial crimes including money laundering.

The public prosecutor's office did not identify the defendants with Awal Bank and The International Banking Corp., or TIBC, in line with Bahraini law. Authorities said the case was referred to the Lower Criminal Court for a March 14 hearing.

Awal Bank is controlled by Maan al-Sanea, who also heads Saudi conglomerate Saad Group. TIBC., is controlled by Saudi conglomerate Ahmad Hamad Algosaibi and Bros., or AHAB. Both banks were placed under administration in 2009 after they defaulted on billions of dollars in loans.

The defaults spiraled into a multibillion dollar dispute between al-Sanea and AHAB, with the Algosaibis accusing al-Sanea of defrauding them of almost $10 billion through a variety of means, including forgery, theft and fraud. Cases against the Saad Group head have been filed in several countries while creditors have sued an AHAB money remittance subsidiary.

Al-Sanea has repeatedly denied any wrongdoing. A representative for Saad Group in London, contacted on Monday, said the company was aware of the Bahraini complaint, but had yet to issue a comment.

The statement carried by the official Bahrain News Agency said that as a result of "the complaints submitted by the Central Bank of Bahrain relating to the ... transgressions by officials at Awal Bank and The International Banking Corp., and the money laundering and fraud crimes attributed to some of them, the prosecution decided to refer some of the accused to the Lower Criminal Court."

The statement, which also appeared in local newspapers including Al-Wasat, said the prosecutor's office would continue its investigations into the alleged money laundering and fraud that was detailed in Central Bank of Bahrain's complaints and reports on the banks. It also said that investigations were continuing in other jurisdictions.

It said that the decision came after the "substantiation" of the violations detailed in the Central Banks' reports and that run afoul of Central Banks regulations.

The statement on the official news agency carried the headline: "Public Prosecutor: Awal Bank and (TIBC) officials referred to court on money laundering charges."

Nawaf Hamza, the public prosecutor, declined to comment further on Monday or to provide details of who was charged.

The case is the first criminal complaints submitted against any official linked to the bank or Saad Group.

Bahrain, whose economy is currently being battered by weeks of protests that have ripped through the Arab world, has been aggressive in its investigations in the collapse of the two banks.

The island nation, which sits off Saudi Arabia's coast, has built its reputation as a regional banking center and an oasis of transparency in a financially opaque region.

The country's Central Bank hired forensic investigation firm Kroll to look into the banks' collapse, but the results of the investigation have not been made public.