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Saudi Graft Settlements Could Reap Billions

Saudi Graft Settlements Could Reap Billions thumbnail

Saudi authorities estimate they may be able to recover between $50 billion and $100 billion from settlement agreements with suspects detained in an anti-corruption crackdown that has implicated prominent princes, officials and billionaires, a senior official said.

Suspects are being offered settlements to avoid trial, the official said, requesting anonymity to discuss the ongoing investigation. If they accept, talks are held with a special committee to work out the details. Payments are based on the amounts authorities believe suspects have amassed illegally, not their entire wealth, the official said.

Prince Alwaleed Bin Talal

Photographer: Mohammad Obaidi/Bloomberg

The purge, which saw royals and billionaires such as Prince Alwaleed bin Talal detained, shook the kingdom and reverberated abroad as diplomats, bankers and analysts sought to figure out its impact on wealthy clients as well as the struggle for power in the world’s biggest oil exporter.

Prince Miteb bin Abdullah was held in the crackdown and also fired from his post as head of the powerful National Guard, a move that reinforced speculation that King Salman was preparing the ground to hand over power to his son and heir, Crown Prince Mohammed bin Salman.

The purge has widened to the military. The senior official said 14 retired officers who worked at the Ministry of Defense and two retired National Guard officers had been detained on suspicion of being involved in financial contracts that were deemed corrupt. No active-duty officers have been arrested, he said.

The crackdown comes at a delicate time for Saudi Arabia, an absolute monarchy grappling with the worst economic slowdown since 2009 as well as political unrest in the region, stirred in no small part by Prince Mohammed’s aggressive foreign policy to counter Iran’s influence. In the past two years, the prince has thrust Saudi Arabia into war in Yemen and led a regional boycott of neighboring Qatar.

At home, his blueprint for the post-oil era has seen authorities cut subsidies and announce plans to sell stakes in state assets to the public, including oil giant Saudi Aramco.

The purge will likely impact already sluggish private investment, hitting economic growth in 2018, according to Ziad Daoud, a Dubai-based economist at Bloomberg Economics.

“This hit from investment to growth is potentially large. Investment globally tends to be volatile and subject to sharp changes in sentiment, and Saudi Arabia is no exception,” he wrote in a note.

While settlements in corruption cases aren’t uncommon globally, Saudi Arabia lacks the transparent institutional mechanisms that are used elsewhere to determine financial penalties. Authorities have said those accused will have access to legal resources.

Foreign Reserves

Funds recouped from the settlement talks are unlikely to provide much support to the central bank’s foreign-currency reserves, which have plummeted by about $260 billion from their peak in 2014, according to Jean-Michel Saliba, London-based economist at BofA Merrill Lynch.

The international holdings of Saudi private companies — excluding banks and investment funds — did not exceed $100 billion at the end of 2015, he wrote. “We would expect only a small fraction of that to be at risk within this probe.”

Saudi Arabia’s market regulator has frozen the trading accounts of people detained or investigated, people familiar with the matter have said. Saudi authorities allege at least $100 billion has been siphoned off over decades through corruption and embezzlement.

Khalid Bin Abdulaziz Al-Falih

Photographer: Simon Dawson/Bloomberg

The purge won’t harm foreign investment or the kingdom’s plan for an initial public offering of its oil company, Energy and Industry Minister Khalid Al-Falih said on Thursday.

“I am in touch with many foreign investors. Everybody understands that this is a very limited domestic affair,” Al-Falih told reporters on the sidelines of the Bonn climate conference. “The government is simply cleaning house for something that is way overdue.”

 

bloomberg



16 Comments on "Saudi Graft Settlements Could Reap Billions"

  1. Shortend on Mon, 20th Nov 2017 7:42 am 

    Years ago there was a 60 minutes TV segment that actually was on corruption in SA. Remember one leading government head stating they knew it existed and EVERY society has it.
    Yes, especially here in the United States.
    Anyway, even with the corruption and graft SA was able to get things accomplished. The official later claimed it was on the low end of the scale compared to other places.
    So, is this a story.

  2. Makati1 on Mon, 20th Nov 2017 5:18 pm 

    Food for thought: “100 billion reasons to have non-reportable assets”

    See above article…

    https://www.sovereignman.com/international-diversification-strategies/100-billion-reasons-to-have-non-reportable-assets-22629/

    If you are an American, everything is reportable, anywhere in the world. Land, home, business, income, stocks, bonds, bank accounts, income, etc. I have no “reportable” assets to be concerned about. Do you?

  3. Anonymouse1 on Mon, 20th Nov 2017 5:41 pm 

    LoL, it is a ‘royal shakedown’ in progress. Would be almost laudable IF any of the reasons given for it all by mainstream dis-information networks, ie ‘anti-corruption’ were remotely credible.

    [Spoiler Alert – They are not]

    Still, always nice to see one group of thieves trying to squeeze another set of thieves.

  4. onlooker on Mon, 20th Nov 2017 5:44 pm 

    Survival of the fittest time for the royals of KSA. Let them eat oil

  5. Davy on Mon, 20th Nov 2017 6:06 pm 

    “Food for thought: “100 billion reasons to have non-reportable assets”
    Mad kat, did you tell widdle g you found that article on Zero Hedge? He has told you there is nothing but disinformation over there. LOL

  6. MASTERMIND on Mon, 20th Nov 2017 6:44 pm 

    The Saudi’s accusing others of corruption is like a serial arsonist accusing others of starting fires.

  7. GregT on Mon, 20th Nov 2017 7:34 pm 

    “Mad kat, did you tell widdle g you found that article on Zero Hedge? He has told you there is nothing but disinformation over there. LOL”

    Wrong again delusionalist. I pointed out to you that your heroes writing under the pseudonym ‘Tyler Durden’ were intentionally spreading disinformation.

    The article that Makati1 linked was written by Simon Black at sovereignman.com.

    More delusional accusations on your part.

    Get help psycho.

  8. Davy on Mon, 20th Nov 2017 8:09 pm 

    Widdle, he was on Zero Hedge. That is where he found the article. Lol. Who cares, you are the one who makes a big deal about Zero Hedge. I guess there is too many articles that contradict your conspiracies and revisions. Lol. You are incapable of wading through the shit to find morsels of truth becuase you are too insecure in your fake anti-American world. Quit being a pussy.

  9. Sissyfuss on Mon, 20th Nov 2017 9:30 pm 

    MM, The Saud Royal family accusing others of corruption is like Clogincest telling us his kids are mulatto.

  10. Anonymouse1 on Mon, 20th Nov 2017 10:46 pm 

    If cloggen-fraud ever had any spawn, they would automatically qualify for Israeli citizenship, regardless.

  11. GregT on Tue, 21st Nov 2017 1:32 am 

    “Widdle, he was on Zero Hedge. That is where he found the article. Lol. Who cares, you are the one who makes a big deal about Zero Hedge.”

    Wrong again delusionalist. I pointed out to you that your heroes writing under the pseudonym ‘Tyler Durden’ were intentionally spreading disinformation.
    The article that Makati1 linked was written by Simon Black at sovereignman.com.

    More of your usual delusions dummy.

    Get help.

  12. Davy on Tue, 21st Nov 2017 2:38 am 

    “The article that Makati1 linked was written by Simon Black at sovereignman.com.”
    Widdle, mad kat, was on Zero hedge and got the article. LOL. The spreader of disinformation has you clueless:
    http://www.zerohedge.com/news/2017-11-20/100-billion-reasons-have-non-reportable-assets

  13. joe on Tue, 21st Nov 2017 8:54 am 

    Does anyone seriously believe these guys will buy their freedom by handing over their empires then ride off into the sunset and live happily ever after. Nobody seems to be paying the slightest attention to the historic Russian visit just prior to the coup. The US must be very worried cause it has to appear to claim to support this coup otherwise it would look weak. Very clever move by MBS, he even has the Israelis claiming to back him (sure an attempt to depopularise MBS). SAUDI ARABIA, is the next Iraq.

  14. Davy on Thu, 23rd Nov 2017 3:32 am 

    It is hard to talk about this subject in today’s polarized world but I think it makes a good point. Obama/Clinton/McCain Syria policy was a disaster. Putin’s was a success and let’s be clear he was forced into it. There is an internal war going on in Washington DC. This Syria failure and the progress of this war/witch hunt are related. Trump may be a disaster but it is unclear who is/was worse.
    “One thing is clear the U.S. has lost all credibility in the region outside of Riyadh and Tel Aviv.” I would agree with that but US/Riyadh/Tel Aviv are too big to ignore and they are not going away. With the US I see change only coming once this internal war is finished.

    “Did The Putin/Assad Meeting Cement The End Of America’s Mid-East Dominance?”
    http://tinyurl.com/ychlzhf3

    “In truth, the whole speech is worth revisiting. It is a stark reminder that Putin, normally very reserved in his words, laid all of his cards on the table and directly accused the United States of declaring war on the world.”

    “Putin told everyone, “Enough is enough” at the U.N. Then he backed up his words with actions. War is always regrettable. It is almost never justified. But, when faced with an implacable enemy, there was little else to be done.”

    “Putin Won’t Gloat The big question is, however, what price will be extracted from the U.S. for their part in all of this. Putin will not put Trump in a bad position. The loss of face for the U.S. has already occurred internationally.”

    “Putin will offer Trump a way to save face for the U.S. while laying all the blame on Obama, Clinton, McCain and the rest of them. If you don’t think this ties into Robert Mueller’s ‘Russia-Gate’ investigation run amok, you aren’t paying attention. Mueller is trying to desperately save everyone implicated here from treason charges. But, I expect, everything about the U.S. political scene is about to change radically.”

    “Whatever happens after this – framework for long-term peace or an uneasy ceasefire with Russia playing the go-between for the time being – the U.S. has lost all credibility in the region outside of Riyadh and Tel Aviv. And we have no one to blame except ourselves.”

  15. joe on Thu, 23rd Nov 2017 8:19 am 

    Article makes a good point. However things are much worse than they seem. We forget that each player is acting out their role in their won plans as they see them, then you mix in the reactions to the unexpected and there you have politics. We got so used to seeing the US doing whatever it wants, whenever it wants we forgot that there are other nations that can act and have the balls to. Noam Chomsky has always pointed out that he believes the US acts against Russia so much because Russia is the last sovereign nation on earth.
    So far reports of torture are starting to slowly leak out, this ‘anti-corruption’ drive is proving to be horrible corrupt, and it seriously jeopardizes any hope of middle east peace.
    http://www.dailymail.co.uk/news/article-5108651/American-mercenaries-torturing-Saudi-princes.html

    Saad Hariri, is no doubt on his way home to be assassinated by mossad agents in an effort to force Hizbollah into a civil war and hope for a return to Israeli policy of weak neighbours. Nobody in Lebanon will be fooled, but the push for war is always powerful, God help Lebanon and God condem France for facilitating Israel/Saudi in these matters.

    Saudi is buying another 7billion dollars worth of bombs for war in Yemen, how long before they start having to drop them on Shia Saudis in SA when the shit hits the fan is anyones guess. Might be a good time to start stocking up on gas, worldwide….

    Russia might be the only one left standing that can supply easy oil to Eurasia, most of that will go to China once Europe gets cut off. This Saudi MBS wont last long cause ruling by blood and torture of their own family was not the Saudi way until now.

  16. Davy on Thu, 23rd Nov 2017 9:41 am 

    Joe, people that talk about geopolitical realities in sure terms generally are peddling their agenda. I see thing in a much less dramatic light with many subtleties. You clearly are painting a picture of a world according to Joe. I am not saying your rendition is poor just that it is full of holes and is speculative.

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