Citigroup, Twitter, Lyft: Prince’s Arrest Touches Many...

Saudi billionaire Alwaleed's arrest rattles investors

HONG KONG — With the arrest of Prince Alwaleed bin Talal, the prominent billionaire investor, Saudi Arabia has touched one of the richest and most influential investors in the world.

Among Prince Alwaleed’s crown jewels: sizable stakes in Twitter, Lyft and Citigroup. He has gone into business with some of the corporate world’s biggest titans, including Bill Gates, Rupert Murdoch and Michael R. Bloomberg.

His investments span the globe, including the Four Seasons Hotel George V in Paris, the Savoy in London and the Plaza in New York. He has also invested in the AccorHotels chain and Canary Wharf, the London business development.

So vast are his investments that he has been referred to as the Warren Buffett of the Middle East.

Prince Alwaleed’s arrest is likely to reverberate across dozens of companies around the world that count the investment company that he founded, Kingdom Holding, as a major investor or shareholder.

The move was part of a sweeping and unprecedented roundup of at least 10 other princes, four ministers and dozens of former ministers, hours after the Saudi ruler, King Salman, decreed the creation of a powerful new anticorruption committee, led by his favorite son and top adviser, Crown Prince Mohammed bin Salman.

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The arrests appeared to be the crown prince’s latest step to make good on his ambitious modernization plans and to further consolidate the remarkable degree of power he has amassed at age 32 over military, foreign, economic and social policies. His ascent and brash approach have angered some members of the royal family.

Prince Alwaleed, a 62-year-old with an Omar Sharif mustache, ubiquitous sunshades and penchant for publicity, is a relatively flamboyant figure for the royal family and is one of the most prominent Saudis internationally. His arrest seems aimed at demonstrating that no one is beyond the reach of the committee and the crown prince.

The confinement of the princes, said to be in the Ritz-Carlton hotel in Riyadh, could be a particularly strange experience for Prince Alwaleed, who owns stakes in a number of Four Seasons hotels.

Prince Alwaleed’s style was on display during a trip to the Red Sea resort of Sharm el Sheikh, Egypt, in August. In a turn worthy of President Vladimir V. Putin of Russia, a promotional video from the trip shows the prince, bare-chested and wearing a pair of shorts, leading an entourage of men around the resort — cycling, playing beach volleyball, doing the backstroke, water-skiing, and hiking up a mountain, pumping his arms above his head triumphantly while clutching a cellphone in one hand.

Set to action-movie music, much of the video unfolds against the backdrop of his 280-foot yacht, the Kingdom 5KR.
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During the trip, the prince, who already owns several dozen hotels in Egypt, announced a further $800 million investment in the country’s tourism industry. He drew criticism from some conservative Egyptians for a video that showed him meeting with Egypt’s female minister of investment and international cooperation, Sahar Nasr, aboard his yacht while he was again wearing shorts. It was unusual protocol in a public meeting for a member of the family that rules a hyperconservative Islamic kingdom.

The arrests also come as Crown Prince Mohammed has forged a close relationship with President Trump, who shares his aggressive approach to Saudi’s regional rival, Iran, and his penchant for bold decisions.

By contrast, Prince Alwaleed sparred with Mr. Trump on Twitter during the American presidential election, referring to him as a “disgrace not only to the GOP but to all America.” Mr. Trump fired back, also on Twitter, that he was a “dopey prince” trying to “control our U.S. politicians with daddy’s money.”

But despite his wealth, Prince Alwaleed was not seen as particularly powerful within the Saudi royal family or as a threat to the crown prince’s consolidation of power. His father, Prince Talal, known as the “Red Prince,” spent years in exile after leading a kind of leftist revolt among royals in 1962, and had grumbled in the past about being passed over in the royal succession. Prince Alwaleed himself initially objected to the naming of Mohammed as crown prince, though he quickly stopped complaining in public.

A more likely reason for his inclusion in the arrests, experts said, is that he might have gone bankrupt during the 2008 financial crisis. He had been highly leveraged and somehow got elements of the government to bail him out, through his connections to then-King Abdullah and the finance minister, who is also said to have been arrested. Prince Alwaleed’s son Prince Khaled is married to the minister’s daughter.

“They must have uncovered evidence of irregular activity and wanted to make an example of him,” Ali Shihabi, founder of the independent Arabia Foundation in Washington, said on Sunday from Abu Dhabi in a telephone interview.

Others said there was bad blood between Prince Alwaleed and the crown prince. A former United States ambassador, Chas W. Freeman Jr., said it could be that Prince Alwaleed “has been strongly identified in Saudi with civil society, which is by its very nature a counter to concentration of power.”

“He has a reputation,” Mr. Freeman said, “for being quite outspoken and blunt and being critical of other parts of the royal family — and he’s not well liked.”

Others said they were surprised at the takedown of someone who has been an ambassador to international business.

“I haven’t heard anything about Alwaleed being politically active in a way that would threaten M.B.S.,” said F. Gregory Gause III, an expert on Saudi Arabia and a professor at Texas A&M University, referring to the crown prince by his initials.

The surprising arrests of Prince Alwaleed and other prominent figures in the private sector and technocratic class, experts said, could shake investor confidence in Saudi Arabia as the kingdom tries to shed its image as an oil-dependent petrostate. The move comes just days after Saudi Arabia held a major investment conference to drum up interest in that effort.

Saudi Arabia is also trying to diversify its economy, a top priority of the crown prince. The kingdom is planning to list the state-owned oil giant Saudi Aramco next year in what is expected to be the biggest initial public offering in history.

President Trump publicly called on Saturday for Saudi Arabia to list the company in the United States.

Prince Alwaleed is the kind of Saudi figure who makes Western investors and visitors feel comfortable in a kingdom known for its ultraconservative ideology, with its bans on the practice of religions other than Islam and, until recently, on women drivers — exactly the kind of modernizing person Prince Mohammed has typically sought to promote.

He comes across in person as relaxed, not formal or rigid, and focused on business. A New York Times reporter who visited his office years ago found towering pictures of his daughter, without a head scarf. The prince’s welcome was typical of his grand gestures: He presented the reporter, visiting in the days before the internet, with a full-length printout of The Times.

More recently, Prince Alwaleed made early bets on some of the technology world’s biggest stars, earning him handsome returns. He bought a strategic stake in JD.com, a Chinese online retailer, anticipating China’s emergence as a vast e-commerce market.

In moments of corporate crises, Prince Alwaleed has stepped in to tip the balance.

When the phone hacking scandal rocked a London tabloid owned by the Murdochs, the prince went on the BBC to say that Rebekah Brooks, then the chief executive of the British unit of Mr. Murdoch’s News Corporation, should resign. “You bet she has to go,” he said in July 2011. She resigned the next day.

At the time, Prince Alwaleed was the second-biggest shareholder in News Corporation, with a more than 6 percent stake. He later sold most of his stake in the company.

In the darkest hours of the 2008 financial crisis, Prince Alwaleed said he would increase his stake in Citigroup — a move of solidarity with the then-embattled bank’s chief executive, Vikram S. Pandit.

Prince Alwaleed has worked closely with some of Wall Street’s biggest and best known banks and investors.

Just a month ago, Lloyd C. Blankfein, the chairman and chief executive of Goldman Sachs, sat across from Prince Alwaleed at a meeting in Riyadh. The two talked about investments and economic developments in the Middle East. A longtime banker for Kingdom Holding, Goldman Sachs recently helped Prince Alwaleed’s company acquire a 16 percent stake in Banque Saudi Fransi, the Saudi bank.

When he traveled to New York in 2016, Prince Alwaleed met with Mr. Blankfein and Mr. Bloomberg. After a meeting, Mr. Bloomberg agreed to support news programming on the Alarab News Channel, a venture Prince Alwaleed owns privately.

Prince Alwaleed also shares an investment with Mr. Gates, the co-founder of Microsoft, in Four Seasons Hotels and Resorts.

Jamal Khashoggi, a Saudi journalist and former government official who fled into exile during the summer, said Prince Alwaleed had lately become a vocal supporter of the crown prince’s economic reforms and tried to persuade him to return to the country. Mr. Khashoggi said the prince sent him a text message saying, “An enlightened mind like you should be with us now building the fourth Saudi state under Mohammed bin Salman.”

But Prince Mohammad appeared to have been keeping his distance, delaying four months before granting a requested meeting, Mr. Khashoggi said, adding, “I’m sure that hurt him. But Alwaleed is royalist. He believes in the solidarity of the royal family.”

By ALEXANDRA STEVENSON, ANNE BARNARD and NEIL MacFARQUHARNOV.

StevieRay Hansen Investigative Reporter for SrhNews.com and HNewsWire.com

Tags Politics Tagged Under: Tags:Breaking News,World Events,The surprising arrests of Prince Alwaleed, Solidarity of the royal family,Kingdom Holding

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