Saudi Prince Alwaleed bin Talal, a renowned tech investor, got arrested by an anti-corruption body headed by the Saudi Crown Prince.
On Saturday, Saudi Arabia’s newly formed anti-corruption committee, led by the deputy crown prince Mohammad bin Salman, arrested at least 11 princes and several top officials. This is one of the biggest crackdowns in Saudi Arabian history, that involves Kingdom’s affluent elite.
According to a Saudi official, the allegations against the men include money laundering, extortion, bribery and taking advantage of public office for personal gain.
Prince Alwaleed bin Talal, one of the world’s wealthiest men and a prominent name in the financial market is also included in the list of detainees.
Prince Alwaleed’s investment firm, Kingdom Holding, of which he holds 95%, holds shares in Citigroup, Twitter, Apple and a growing number of tech companies.
In 2011, Kingdom Holding invested $300 million in Twitter, two years before Twitter went public. In 2015, Kingdom Holding paid another $50 million to double its stake in the microblogging social site and remained company’s one of the biggest shareholders, owning 5% of the company.
Kingdom Holding also acquired 2.5% of JD.com in 2013, a China-based e-commerce company that went public on Nasdaq in 2014 and whose shares have doubled since.
Last year Prince Alwaleed and Kingdom Holding acquired a stake in the car-hailing company Lyft by buying $148 million worth shares from early investors Andreessen Horowitz and Founders Fund.
The list of prince’s global holdings is quite extensive including some big names like Citigroup, shares of which he owned since 1991, mass media corporation Twenty-first Century Fox, London’s Savoy hotel and Arab’s world’s largest entertainment company, Rotana Group.
In March 2015, Prince Alwaleed and members of his investment company held talks with the senior management of Snap. Kingdom Holding stated that they had discussions with Snap CEO Evan Spiegel and chief strategy officer, Imran Khan about a possible investment in Snap. However, a few months later, a source close to the matter said that Kingdom Holding had no plans to invest.
The Prince had been an influential tech investor since the late 90s and had owned shares of Apple and eBay for more than 15 years.
The financial market is stunned by his arrestment and investors are reacting badly as they are worried about the firms associated with him.
“From a sentiment perspective, this will hurt the business associated with the prince,” said Nabil Rantisi, the managing director of brokerage at Menacorp, a United Arab Emirates investment firm.
The arrests were ordered just hours after King Salman announced the creation of the anti-corruption committee headed by the crown prince Mohammed bin Salman. Analysts are speculating that the 32-year-old crown prince aka MBS is consolidating power and asserting control on the oil-rich kingdom.
“Major investors may shy away from these companies for a while until they have more clarity on the outcome of the situation,” Rantisi said.
The New York Times stated, “The sweeping campaign of arrests appears to be the latest move to consolidate the power of Crown Prince Mohammed bin Salman, the favorite son and top adviser of King Salman.”
According to the Times, the detained princes and officials are housed at the Ritz Carlton in Riyadh. The five-star hotel was immediately evacuated after the arrestment and the airports for private planes were shuttered.
Earlier this month, Forbes declared Prince Alwaleed the 45th richest man in the world, with an estimated wealth of about $17bn.
Last year, he signed up for the ‘giving pledge’ of Bill Gates and Warren Buffet. CEO Salesforce Marc Benioff, the three co-founders of Airbnb (Brian Chesky, Joe Gebbia and Nathan Blecharczyk) and Intuit founder Scott Cook signed the pledge along prince Alwaleed at the time. It is still unclear whether the anti-corruption committee will seek to confiscate any of his assets.
The prince Muhammad bin Salman, according to the Washington Post, had been ‘outmaneuvering and openly resisting’ his elders since his father King Salman assumed the throne in 2015. He has started a bold reform campaign and has turned the politics of the monarchy upside down. Prince Muhammed has the potential to either reshape Saudi Arabia into a more modern, dynamic country – or else drive it off a cliff.
MBS, at an investor conference held in Riyadh last month, said that he aims to “return Saudi Arabia to the moderate Islam that once prevailed” before the Iranian Revolution 1979. The conference was also attended by U.S. billionaire investor Peter Thiel.
In April, he introduced an economic roadmap for the kingdom called ‘Vision 2030’ that aims at privatizing 5% of Aramco, country’s flagship petroleum company.
Aramco is soon to debut its share in the Saudi domestic market and expected to list on at least one foreign exchange. Just yesterday, the company got a high profile pitch for its upcoming IPO from the president of United States, Donald Trump. Trump wrote that Aramco is “important to the United States!”
Last month, Prince Alwaleed talking with CNBC suggested that Saudi Arabia could make an even bigger portion of Aramco available to investors in upcoming years.
“No one talks about this idea that if you go 5 percent, there’s nothing that prohibits you from going another 5 percent next year, and 5 percent the third year and fourth year, and so forth, depending on the situation,” he told media outlet.
“I know this is our treasure, and we have to keep it. But that treasure also needs to support the country,” he added.