BEIRUT: UAE-based Al Habtoor Group said on Monday it will pursue legal action against Lebanese authorities over $1.7 ‍billion in lost ‍investments, dealing a possible blow to the Lebanese government's efforts to ​encourage Gulf funding as a way to kickstart its economy.

Lebanon's 2019 financial collapse gutted its ⁠banking sector and left depositors - from individuals to large corporations - locked out of their savings. The ⁠measures taken ‌by banks amounted to informal capital controls, although the government never passed a formal law enshrining such practices.

In an emailed statement, Al ⁠Habtoor Group said that its "investments have suffered severe and sustained harm as a direct result of measures and restrictions imposed by Lebanese authorities and the Banque du Liban, which have prevented the Group from freely accessing and transferring ⁠lawfully deposited funds held in Lebanese ​banks".

The group said it had exhausted efforts to resolve the dispute amicably and would proceed with legal ‍action over damages to its assets and properties in Lebanon, which it said exceeded $1.7 billion. It did ​not specify whether it had already taken such action nor in which jurisdiction.

The office of Lebanon's Prime Minister Nawaf Salam and the press office of Banque du Liban, the country's central bank, did not immediately respond to requests for comment. For decades, investment and financial inflows from Gulf states were a major source of foreign currency in Lebanon but after the country's financial collapse, some Gulf states reeled in investments and banned the imports of Lebanese goods.

While ties have been slowly thawing, most Gulf ⁠states are hesitant to invest until Lebanon enacts ‌financial reforms approved by the International Monetary Fund. In January 2025, Khalaf Ahmad Al Habtoor, the head of the Dubai conglomerate, said he had cancelled all planned investments ‌in Lebanon due ⁠to continuing instability, and would sell all his properties and investments in the country. (Reporting by ⁠Maya Gebeily; Writing by Tala Ramadan; Editing by Kirsten Donovan)