Expanding anti-graft purge in Saudi Arabia spooks investors

Traders at the Kuwait Stock Exchange. A sell-off across Gulf stock markets was prompted in part by the anti-corruption arrests in Saudi Arabia. Saudi Arabia's stock market continued to fall in early trade yesterday.
Traders at the Kuwait Stock Exchange. A sell-off across Gulf stock markets was prompted in part by the anti-corruption arrests in Saudi Arabia. Saudi Arabia's stock market continued to fall in early trade yesterday.PHOTO: EPA-EFE

RIYADH • Saudi Arabian authorities have made further arrests and frozen more bank accounts in an expanding anti-corruption crackdown on the kingdom's political and business elite, sources familiar with the matter said yesterday.

Dozens of royal family members, officials and business executives have already been held in the purge announced on Saturday. They face allegations of money laundering, bribery, extortion and exploiting public office for personal gain.

But the sources, speaking yesterday, said a number of other individuals suspected of wrongdoing were detained in an expansion of the crackdown, widely seen as an initiative of the powerful heir to the throne, Crown Prince Mohammed bin Salman.

Others under scrutiny are being telephoned by investigators about their finances but appear to remain at liberty, one of the sources said, adding that the number of people targeted by the crackdown was expected eventually to rise into the hundreds. The number of domestic bank accounts frozen as a result of the purge is over 1,700 and rising, up from 1,200 reported on Tuesday, banking sources said.

A number of those held most recently include individuals with links to the immediate family of the late crown prince and defence minister, Prince Sultan bin Abdulaziz, who died in 2011, the sources said.

Others appear to be lower-level managers and officials, one of the sources said.

Coming just two weeks after a glittering investment summit, which Prince Mohammed used as a platform to pledge a "moderate" Saudi Arabia and to showcase his ambitious reform drive, the purge has spooked some businessmen.

Further roiling sentiment are rumours that the venue of the summit, Riyadh's palatial Ritz-Carlton hotel, is where many of the arrested elites are being held.

Saudi Arabia's stock market continued to fall in early trade yesterday because of concerns about the economic impact of its anti-corruption purge. The Saudi Tadawul All-Share Index was 1 per cent lower after half an hour of trade. Shares in companies linked to people detained in the investigation slid further.

Late on Tuesday, Prince Mohammed and the Saudi central bank sought to ease worries about the crackdown.

They said that while individuals were being targeted and having their bank accounts frozen, national and multinational companies - including those wholly or partly owned by individuals under investigation - would not be disrupted.

Since Sunday, the central bank has been expanding the list of accounts it is requiring lenders to freeze on an almost hourly basis, one regional banker said, declining to be named because he was not authorised to speak to the media.

Among business executives detained in the probe so far are billionaire Prince Alwaleed bin Talal, chairman of investment firm Kingdom Holding; Nasser bin Aqeel al-Tayyar, founder of Al Tayyar Travel; Amr al-Dabbagh, chairman of builder Red Sea International; Waleed al-Ibrahim, owner of the influential Arab satellite network MBC; construction tycoon Bakr Bin Laden; and billionaire Saleh Kamal.

The authorities warned that assets related to the corruption cases - potentially worth billions of dollars - would be seized as state property.

REUTERS, AGENCE FRANCE-PRESSE

 
A version of this article appeared in the print edition of The Straits Times on November 09, 2017, with the headline 'Expanding anti-graft purge in Saudi Arabia spooks investors'. Print Edition | Subscribe