Saudi anti-corruption sweep nets wealthy prince with Canadian assets
A Saudi Arabian anti-corruption sweep over the weekend led to the arrest of Prince Alwaleed bin Talal, named by Forbes as the world’s 45th-richest person, a move which analysts say could eventually lead to more confidence in the kingdom’s financial markets.
In addition to scores of other royals, Saudi officials announced the arrest of Prince Alwaleed over the weekend, which sent shock waves through investment circles around the world, including in Canada, where his company owned hotels.
The 62-year-old Saudi prince’s Kingdom Holding Co. owns a stake in Toronto-based Four Seasons Hotels and Resorts and in Fairmont Raffles Hotels, which owns iconic hotels like the Banff Springs in Alberta, Toronto’s Royal York and Chateau Frontenac in Quebec City.
Kingdom Holding’s website describes Prince Alwaleed as “one of the world’s leading investors.” The firm has stakes in major U.S. companies like Citigroup, Apple, Twitter, eBay, News Corp., Time Warner Inc. and ride-hailing app Lyft.
Prince Alwaleed once sued Forbes magazine for, he said, understating his wealth on its annual list of world’s richest people. Unlike other billionaires, many of whom prefer to be overlooked and left off the list, he said Forbes was biased against Middle Eastern people for reporting his net worth was $20 billion, instead of his own estimate of $29.6 billion at that time.
The magazine pegged his net worth at US$16.8 billion on Monday, following the allegations.
Kingdom Holding’s shares dropped over five per cent Monday on the Tadawul, the kingdom’s stock market, to close at nine Saudi Arabian riyals.
Kingdom Holding’s CEO Talal al Maiman issued a statement over the weekend that “normal business operations” continue following the arrest of its chairman, and the government had expressed confidence in the company. “The support of the government of the Kingdom of Saudi Arabia to Kingdom Holding is a badge of honour for us.”
Saudi officials have been trying to open the Tadawul up to more foreign investors in recent years and the arrest of rich Saudis over the weekend in an anti-corruption sweep could lead to more confidence in the market, University of Calgary School of Public Policy executive fellow Robert Skinner said.
Skinner said Saudi Crown Prince Mohammad bin Salman has been clear, even outlining in a 300-page vision for transforming the kingdom by 2030, that nobody would be exempt from corruption rules — not even the rich and powerful.
That vision includes the warning that, “We will immediately adopt wide-ranging transparency and accountability reforms and, through the body set up to measure the performance of government agencies, hold them accountable for any shortcomings.”
“How could anybody say they were surprised by this?” Skinner said, adding the crown prince’s focus on cleaning up corruption has been publicly broadcast and many Saudi royals have been caught in “scandal after scandal.”
“How is (the country) going to get the big-name brands from the OECD countries to invest in Saudi Arabia when the moment they make an investment, social media users will debate or criticize them for investing in ‘this corrupt country that doesn’t allow women to drive,’” Skinner said. “He’s got to create an environment that takes away that criticism.”
“An alliance between members of the business community and different royals has led to significant waste, corruption and co-opting of government revenues,” Eurasia Group analyst Ayham Kamel wrote in a research note, adding the corruption sweep will also likely be popular with the Saudi public.