Saudi Arabia moves to ease fears over effects of anti-corruption drive
London- Saudi Arabia moved to ease fears regarding its unprecedented anti-corruption crackdown, with a high-ranking official stressing the investigation would not adversely affect investments in the kingdom.
Speaking November 16 at the UN climate conference in Germany, Saudi Energy Minister Khalid al-Falih said the kingdom’s anti-corruption investigation involved a limited number of individuals and would not hinder investment plans, including Saudi Aramco’s initial public offering (IPO), expected next year.
“Everybody understands that this is a limited, domestic affair that the government is simply cleaning house,” Falih told Reuters. “It has no impact on foreign direct investment. It has no impact whatsoever on the kingdom’s openness, capital flows and our wide-open investment environment.”
He added that many foreign investors doing business in Saudi Arabia “will tell you that they have not seen corruption in their interactions with the Saudi government or with the Saudi entities.”
The Financial Times reported that Saudi authorities leading the investigation were negotiating settlements with some detainees, including members of the royal family, former government officials and prominent businessmen.
Those held on corruption charges would be required to return misappropriated funds in return for the release, the Financial Times said. Some suspects would have to turn over as much as 70% of their wealth.
Saudi officials began the country’s biggest anti-corruption investigation, targeting powerful individuals once believed in Saudi society to be untouchable.
The anti-corruption task force was established November 4 by Saudi King Salman bin Abdulaziz Al Saud by royal decree and is overseen by Crown Prince Mohammed bin Salman bin Abdulaziz. It has the jurisdiction to “investigate, issue arrest warrants, travel bans and freeze accounts and portfolios,” a statement carried by the official Saudi Press Agency said.
The arrests came after a three-year investigation. The Dubai-based Al Arabiya news channel said 11 princes, a dozen former ministers and four current ministers were among those arrested. Several individuals have since been released.
Saudi Attorney General Sheikh Saud al-Mojeb said more than 200 people had been arrested in the investigation, with possibly more to follow.
Among those arrested were former Minister of the National Guard Prince Mutaib bin Abdullah bin Abdulaziz, former Economy Minister Adel Fakeih, billionaire Prince Al- Waleed bin Talal and Saudi Binladin Group Chairman Bakr bin Laden.
Many people detained during the investigation were held in five-star hotels, including Riyadh’s Ritz- Carlton. A source familiar with the investigation told the Financial Times that the government was “making settlements with most of those in the Ritz.”
“Cough up the cash and you will go home,” the source added.
Mojeb estimated that more than $100 billion had been misappropriated in recent decades and that the investigation had led to the freezing of an estimated 1,700 bank accounts.
Authorities initially only froze personal bank accounts but they expanded that to trading accounts as well. Brokerage firms were ordered by the Saudi Capital Market Authority to suspend the trading accounts of “dozens” of people under investigation, Bloomberg News reported.