Citigroup, 21st Century Fox, Twitter: Saudi Prince's arrest touches many

Prince Alwaleed bin Talal's arrest is likely to reverberate across dozens of companies that count the investment company that he founded, Kingdom Holding Co, as a major investor or shareholder.
Prince Alwaleed bin Talal's arrest is likely to reverberate across dozens of companies that count the investment company that he founded, Kingdom Holding Co, as a major investor or shareholder.PHOTO: REUTERS

HONG KONG (NYTIMES) - 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 Alwaleed's crown jewels: sizable stakes in Twitter, Lyft, Citigroup and 21st Century Fox. He has gone into business with some of the corporate world's biggest titans, from Bill Gates to Rupert Murdoch and Michael Bloomberg.

His investments span the globe, including the historic George V hotel 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. He speaks regularly about the financial world, such as his recent comments expressing skepticism over bitcoin and other cryptocurrencies.

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

It could also 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.

The arrest, which was part of a sweep that included at least 10 other princes as well as current and former ministers, came just hours after the creation of a new anti-corruption committee by King Salman, who gave it broad powers to freeze the assets of anyone it considered corrupt.

Alwaleed made early bets on some of the tech world's biggest stars, including Snap, riding a boom that has catapulted many young entrepreneurs to the top of the rich lists and earned him handsome returns. Alwaleed also made an early bet on JD.com, a Chinese online retailer, anticipating that country's emergence as a vast e-commerce market.

 
 
 

In moments of corporate crises, 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, the chief executive officer of the British unit of Murdoch's News Corp, had to resign. "You bet she has to go," he said in July 2011. She resigned the next day.

At the time, Alwaleed was the second-biggest shareholder in News Corp, with a more than 6 percent stake. He later sold most of it. He also owns a stake in 21st Century Fox, which was a part of News Corp until it was spun off in 2013. The prince played a leading role in the shareholder vote to split the companies, as the second most powerful shareholder behind the Murdoch family.

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

Later, when Pandit faced a rebuke from shareholders over a 2012 pay package that totalled US$15 million (S$20.4 million), the prince said he voted for it, according to a recent interview in Vanity Fair.

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

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

When he traveled to New York in 2016, Alwaleed met with Blankfein and Bloomberg. After a meeting, Bloomberg agreed to support news programming on the Al-Arab News Channel, a venture that Alwaleed owned privately.

Kingdom Holdings has played a role in top leadership at AccorHotels, in which it has a 5.8 per cent stake. A recent news release showed pictures of Alweleed laughing with former French President Nicolas Sarkozy, who was asked to join the board of the French hotel chain this year.

The arrest could shake confidence in Saudi Arabia as it tries to diversify its economy. 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 Donald Trump on Saturday publicly called for Saudi Arabia to list the company in the United States.