THE SHAKE-OUT AT REDEC
Somewhere off the south of France in early 1986 French officials
seized a freighter belonging to Saudi Research and Development
Corporation (Redec). The ship was one of nine owned by Redec but it had
been mortgaged to Wardley Limited, a subsidiary of the Hongkong and
Shanghai Banking Corporation.
Wardley was worried. Redec owed the company SR34.5 million ($10
million) and was reported to be in trouble. Wardley moved fast and had
the ship held. Redec promptly retaliated. It applied to the French
authorities for repossession, promising to issue a bond setting out
fresh repayment terms. But by then the ship had sailed to Crete. Redec
switched its application to the Greek courts and finally managed to
reclaim the ship.
That one episode in the continuing drama of a struggling company,
incidentally the biggest private sector concern in Saudi Arabia. Its
problems illustrate the plight of...
