Saudi officials have warned that the sweeping anti-corruption crackdown allows them to freeze the accounts and assets of suspects, saying initial evidence revealed “widespread corruption in a number of cases”.
Dozens of princes, ministers and leading businessmen have been caught in the dragnet cast by Mohammed bin Salman, the reformist crown prince, including Prince Alwaleed bin Talal, the billionaire investor.
Khalid al-Mehaisen, a member of Prince Mohammed’s anti-corruption committee, said on Monday the suspects had been under investigation for three years and authorities would continue to issue arrest warrants and impose travel restrictions to bring offenders to justice.
“The committee has the authority to reveal the bank details of the accused, freeze their assets and funds, and take other appropriate measures,” he said. “It will ensure that no wrongdoer is able to escape punishment, regardless of their position and status.”
The crackdown came alongside the removal of Prince Miteb bin Abdullah as minster for the elite national guard security force, raising speculation that the inquiry is also being used to clear potential dissent to Prince Mohammed’s grand reform plans.
Prince Alwaleed, a maverick unafraid to challenge government policies in the past, had nonetheless expressed his approval for the thrust of Prince Mohammed’s vision for economic diversification.
The share price of Kingdom Holding, his company, has been battered on the Tadawul exchange since news of his arrest broke. The investment company that manages $12.5bn of assets globally put out a statement saying it had the “full confidence”of the government.
Staff declined to comment but business partners were told there was a vacuum of information internally, with questions swirling about the fate of the company’s assets. “Everything is on hold,” said one person close to the company.
Another said the crackdown had sent a chill through its plush offices. “Everyone has downed tools afraid of getting caught up in this.”
The Saudi authorities could target Prince Alwaleed’s domestic holdings while sparing his overseas portfolio, which spans investments in Citigroup and Twitter, for fear of undermining investor confidence, said one person briefed by Saudi officials.
Other businessmen in the region have been spooked by the broader anti-corruption campaign, telling the Financial Times that they may hold back from potential dealings with the kingdom at a time when Prince Mohammed wants to lure more inward investment to promote diversification.
“Firms might delay investment plans as they wait to see if they will get caught up in the allegations,” said Jason Tuvey, Middle East economist at Capital Economics. “Foreign investment may also be deterred given the rise in uncertainty and the fact that many rely on partnerships with firms owned by those being detained.”
Many Saudis have praised the clampdown as a long-overdue attempt to rein in decades of financial abuse by the kingdom’s elites and, perhaps optimistically, replenish coffers depleted by three years of lower oil prices.
“If the stolen money because of corruption was returned it would be enough to cover the state budget for the next 20 years even if Saudi Arabia stops selling oil,” said one Twitter user.
Prince Mohammed’s committee enjoys wide powers, including authority to issue arrest warrants, track funds and assets and prevent their remittance, according to the royal decree published on Saturday. The committee can also “return funds to the state treasury and register property and assets in the name of state property”, it said.
Sheikh Saud al-Mojeb, the attorney-general, said taking suspects discreetly into custody to prevent “flight from justice” was the first phase and had allowed “a great deal of evidence to be gathered”.
“This does not represent the fullness of the committee’s work but merely the start of a vital process to root out corruption wherever it exists,” he added.
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