Saudi Arabia vows to overhaul courts, laws
RIYADH (Reuters) - Debt problems of family firms have had little effect on investor interest in Saudi Arabia, but the country plans to improve commercial courts and bankruptcy laws, a senior official said on Wednesday.
The major oil exporter is grappling with the fallout of problems of family-owned conglomerates Saad Group SAADG.UL and Ahmad Hamad Algosaibi and Bros which have to reschedule billions of dollars in debt, but it has unveiled few details about the exact size of the debt.
"Next year our focus is investing in the judicial system. A lot of investments have been made in the system in the past two or three years," said Awwad al-Awwad, deputy governor for investment affairs at the Saudi Arabian General Investment Authority (SAGIA).
"Our focus is to have a specialized commercial court," Awwad told the Reuters Middle East Investment Summit in Riyadh.
SAGIA is in charge of bringing investors to the Gulf Arab state, which is rolling out a $400 billion infrastructure program and opening up its economy and stock market.
Analysts and diplomats say the problem highlights the need to improve transparency and legislation in the conservative Muslim kingdom where clerics oversee vast parts of society and dominate courts.
In 2007, King Abdullah ordered the overhaul of the judicial system and allocated $2 billion to train judges and establish new courts, but concrete changes or implementation of new rules remain to be seen, many analysts say.
Saad and Algosaibi are facing lawsuits in foreign courts as analysts say the Saudi judicial system is not efficient.
Awwad also said Saudi Arabia wanted to improve bankruptcy laws to help firms to restructure.
" focusing on helping companies to rehabilitate and restructure, we are looking for amendments in our bankruptcy laws," he said without giving details.
"The central bank already introduced new laws and regulations for the banking system, hopefully we will have something similar to cover all commercial companies," he added.
He said there were indications that foreign direct investments (FDI) would this year exceed the $38.2 billion reached in 2008. He declined to be more specific.
When asked whether the debt problems were affecting investor interest Awwad said: "No, I don't think so."
"In general, we've seen more interest than before," he said. (Editing by Firouz Sedarat and Rupert Winchester)
