Incarcerated for almost two months in a gilded cage in Riyadh’s luxurious Ritz Carlton Hotel, Saudi billionaire businessman Prince Al-Waleed bin Talal appears to be putting up a fight that could challenge Crown Prince Mohammed bin Salman’s assertion that his two month-old purge of scores of members of the ruling family, senior officials, and businessmen constitutes a campaign against corruption.
By After weeks of deafening silence surrounding the fate of Saudi Arabia’s richest man, Prince al-Waleed Bin Talal, arrested last month in an anti-corruption purge, it has emerged authorities in the Gulf monarchy are seeking at least $6 billion for his release. The 62-year-old head of the Kingdom Holding Co. was rounded up with dozens of Saudi government officials and ten other members of the kingdom’s royal family as part of a probe spearheaded by the heir-apparent to the gulf monarchy, Crown Prince Mohammad Bin Salman. While Prince Salman has consistently defended the detention of senior officials as part of a much-needed crackdown on graft, he has been criticized for what detractors have characterized as a thinly veiled power grab. Prince Bin Talal, who had eschewed an official position in the Saudi government and preferred to focus on his own companies and high-profile projects, had in the past exerted a soft power on world business leaders comparable to that of Bin Salman and his father King Salman.
The Wall Street Journal reported that the $6 billion being sought by Saudi officials is among the highest figures they have demanded for those arrested. At the end of November Prince Mutaib Bin Abdullah, the son of the late King Abdullah, a former head of Saudi Arabia’s national guard and a previous frontrunner to the throne was released for a price of $1 billion. Forbes has estimated Prince Bin Talal’s fortune at $18.7 billion, but the prince has reportedly indicated that handing over $6 billion would amount to an admission of guilt, requiring him to dismantle the financial empire that has been his life’s work. Instead, the billionaire businessman may release a large part of his conglomerate, the Kingdom Holding Co. The company’s market value stands at $8.7 billion, although its worth has fallen by some 14 percent following Prince Bin Talal’s arrest. The prince has indicated that he is willing to fight the allegations made against him in court if he has to. “He wants a proper investigation. It is expected that al-Waleed will give [Prince Bin Salman] a hard time,” a person familiar with the matter said. In a rare interview, Mohammad Bin Salman told the New York Times at the end of last month that some 10 percent of government funds had been siphoned off by corruption each year since 1980 until today. Roughly $100 billion is set to be recovered in settlements. Bin Salman, whose rise to power has been meteoric following his appointment as Defense Minister in 2015, said about 95 percent of those targeted in the anti-graft sweep had agreed to a settlement. “About one percent,” he added, “are able to prove they are clean and their case is dropped right there. About four percent say they are not corrupt and with their lawyers want to go to court.”
by huffingtonpost.com – By James Dorsey – In resisting Prince Mohammed’s demands, Prince Al-Waleed is challenging an opaque and seemingly arbitrary process in which despite assertions by the government that it has conducted extensive investigations and collected substantial evidence of corruption, bribery, money laundering and extortion, there has been little, if any, discernible due process and no proof publicly presented. Quoting sources close to Prince Al-Waleed, The Wall Street Journal reported that the businessman was demanding a proper investigation and was willing to fight it out in court. “He wants a proper investigation. It is expected that al-Waleed will give MBS a hard time,” the Journal quoted a person close to Prince Al-Waleed as saying. The person was referring to Prince Mohammed by his initials. A court battle would put the government’s assertions of due process to the test and would also shine a spotlight on the integrity of Saudi Arabia’s judicial system. The risk involved in a legal battle is that the charges levelled against Prince Al-Waleed and others were common practice in a kingdom in which there were no well-defined rules governing relationships between members of the ruling family and the government as well as ties between princes and princesses who wielded influence and businessmen. There is little doubt that Prince Mohammed’s purge is popular among significant segments of the population, half of which is classified as low- or middle-income families, that has long resented the elite’s seemingly unbridled perks. Prince Mohammed has so far been shielded against questions of the source of his own wealth and that of his tack of the ruling family. Several immediate relatives of Prince Mohammed were last year identified in the Panama Papers leaked from the files of a law firm in the Central American nation that handled offshore business and transactions by the world’s mega-rich.
Media reports have since suggested that the crown prince Mohammed Bin Salman had spent in recent years $1.25 billion on a $500 million yacht, a $300 million mansion in France, and a $450 million Leonardo da Vinci painting. Prince Mohammed has denied buying the art work that was acquired by a close associate of his allegedly on behalf of the Abu Dhabi Department of Culture and Tourism. Shining the spotlight on the anti-corruption campaign in a legal battle with Prince Al-Waleed would come at a time that the government is unilaterally rewriting the kingdom’s social contract that involved a cradle-to-grave-welfare state in exchange for surrender of political rights and acceptance of Sunni Muslim ultra-conservative and Bedouin moral codes. The government this week paid $533 million into a newly established social welfare fund to help families offset the cost of the imminent introduction of a five-percent value-added tax on goods including food, and services, as well as subsidy cuts that would substantially raise the price of electricity and gasoline. The government was forced earlier this year to reverse a freeze on public sector wage increases and perks and slowdown its austerity program because of anger and frustration expressed on social media.
Labor and Social Development Minister Ali al-Ghafees told the state-run Saudi Press Agency that approximately three million families or 10.6 million beneficiaries had already been paid the maximum relief of 938 Saudi riyals ($250) out of the newly created fund. The government, moreover, this month announced a $19bn stimulus package that includes subsidised loans for house buyers and developers, fee waivers for small businesses and financial support for distressed companies. It also presented its new budget involving record spending in which funding of defense outstrips that of education in a country with a 12.7 percent unemployment rate. A Bank of America Merrill Lynch report predicted last year that youth unemployment could jump from 33.5 to 42 percent by 2030.
Prince Mohammed is banking on continued public support for his economic and social reforms, and on the fact that once the dust has settled foreign investors will forget whatever misgivings they may have had about the lack of due process and absence of rule law in the anti-corruption crackdown. Foreign diplomats in the kingdom noted that the businesses of those detained or penalized continued to operate and that no foreign interests were caught up in the purge. However, to maintain his popularity, Prince Mohammed will have to manage expectations, deliver jobs, continue to massage the pain of austerity and the introduction of a new social contract, and ensure that the public continues to perceive his purge as an anti-corruption campaign in which the high and mighty are no longer above the law. A legal battle with Prince Al-Waleed that publicly puts to the test the government’s assertions could upset the apple cart. That may be the leverage Prince Al-Waleed hopes will work in his favour as he negotiates his settlement from the confines of the Ritz Carlton.
