MANHATTAN (CN) — Expected now to share 2022 World Cup hosting duties with multiple Gulf nations, the government of Qatar filed a lawsuit Monday that says it fell victim to financial warfare.
Qatar had previously been slated to host the lucrative games alone but says its “physical isolation” drew consternation from financial institutions in league with the governments of Saudi Arabia, the United Arab Emirates and Bahrain.
After FIFA announced in January that a joint-hosting arrangement might make more sense, Qatar is blaming its predicament on a scheme by the First Abu Dhabi Bank and Samba Bank to devalue its currency, the riyal.
The banks are tied to the Emirati and Saudi governments, respectively, and Qatar says there is a simple reason for their machinations.
“If Qatar did not have the financial ability to host the 2022 World Cup, that would leave an opening for the blockading countries to make a bid to host the games as a regional event, instead of solely in Qatar,” the complaint states. “That would bring attention, tourism, and money to the blockading countries. Indeed, the UAE has publicly announced that it would be willing to co-host World Cup games.
Represented by the law firm Paul Weiss Rifkind, Qatar claims that the currency-devaluation scheme involved fictitious quoting, or “spoofing,” and crossing transactions, known as “wash sales.”
“The fictitious quotes had defendants’ desired manipulative effect: they altered the Bloomberg and Reuters composite rates to show a devalued price of the Riyal,” the complaint states. “In response, Qatar liquidated investments, including nearly $3 billion in U.S. Treasury bills and notes held by Qatar in accounts in New York County, incurred losses, and drew down foreign currency reserves, using more than $40 billion to support its currency.”
According to the complaint, the fictitious quotes began during the Eid al-Fitr holidays, one of the holiest periods of the Muslim calendar.
While the complaint makes no mention of this, Qatar has been on the outs with its neighbors in the Gulf since 2017, accused of destabilizing the region with its support for Islamist and terrorist groups.
First Abu Dhabi Bank did not immediately respond to an email request for comment.
Monday’s lawsuit follows publication in November 2017 of a leaked document by the Luxembourg-based Banque Havilland, detailing a plan to drive down the value of Qatar’s bonds and increase the cost of insuring them.
The file was reported to have been found in the task folder of an email account belonged to Yousef al-Otaiba, the ambassador for the United Arab Emirates to the United States.
Havilland is owned by the family of British developer David Rowland, a major donor to the United Kingdom’s Conservative party whom Qatar claims “enjoys a close business relationship with the Crown Prince of Abu Dhabi.”
Neither Havilland nor any members of the Rowland family are named as defendants in the 34-page complaint filed Monday in Manhattan Supreme Court.