Earlier today, when discussing the Saudi bank account and asset freeze (and confiscation) of dozens of princes and ministers, we said that just the haul of billionaire prince Alwaleed's $19 billion in various holdings, including nearly a billion dollars in jewelry, plans, yachts, furniture and cash...
... would be an efficient way of refilling Saudi's rapidly declining foreign reserves. And refilling they need: as shown in the chart below, Saudi reserves have declined from their peak in 2014 by over a quarter trillion dollars as a result of the roughly 50% drop in gas prices in the past 3 years.
Of course, it's not just Alwaleed whose net worth is at risk of becoming nationalized. As Bloomberg writes, "the stunning series of arrests has implicated three of the country’s richest people, including Prince Alwaleed bin Talal, who’s No. 50 on the Bloomberg Billionaires Index ranking of the world’s 500 richest people, with $19 billion. Also being held are the kingdom’s second- and fifth-wealthiest people, as well as a travel-agency mogul and Bakr Binladin, a scion of a one of the country’s biggest construction empires." He is also, of course, Osama bin Laden's brother as discussed yesterday.
All told, up to $33 billion in (arrested) royalty wealth is at risk of confiscation.
Here is Bloomberg's breakdown of the 4 Saudi individuals who stand to lose the most from the latest purge:
Alwaleed bin Talal, $19 billion
Alwaleed’s publicly traded Kingdom Holding Group released a statement saying it "enjoys a solid financial position" and the government has "full confidence" in the company.
* * *
Mohammed Al Amoudi, $10.1 billion
Tim Pendry, Al Amoudi’s London-based spokesman said in a statement Monday that the arrest "is an internal matter for the kingdom and we have no further comment to make other than to say that the overseas businesses owned by the Sheikh remain unaffected by this development."
* * *
Saleh Kamel, $3.7 billion
Albaraka Banking Group said in a statement that the arrest didn’t have a direct impact on the company and that Kamel didn’t serve on the bank’s board.
* * *
Nasser Al Tayyar, $600 million
The company said in a statement to the Saudi Stock Exchange that its operations are continuing, and that it’s safeguarding the interests of its customers and shareholders.
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And while the people listed above may soon find themselves up to $33 billion poorer, at least they will do so in style: they remain confined at the Riyadh Ritz-Carlton...
... where the atmospehere, however, is less than enjoyable.
— SaadAbedine (@SaadAbedine) November 6, 2017
Still, more arrests may be imminent: according to Bloomberg, two of the four Saudis on the Bloomberg index haven’t been detained in the sweep: hotel magnate Mohamed bin Issa Al Jaber, who has an $8.3 billion fortune and splits his time between Paris, London, Vienna and Jeddah, and Prince Sultan Bin Mohammed Al Kabeer, the biggest individual shareholder in food processor Almarai Company, who has $4.7 billion. If the Saudi budget needs an additional $13 billion in urgent funding needs, they will likely be next.
* * *
The moral of the story: the Saudi royal family - whether in conjunction with Jared Kushner or independently - certainly knows how to kill two birds with one stone: not only has Mohammad Bin Salmaneliminated the bulk of his potential political opponents in one day, he also boosted the Saudi reserves by 7% in one day.
There is just one trade-off: if Riyadh thinks it is sending a soothing message of stability to potential Aramco investors that the rule of law in Saudi Arabia is sacrosanct, and that contractual agreement in Saudi Arabia are inviolable, well... good luck.
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