Saudi Crown Prince Mohammed bin Salman isn’t about to rest on his laurels. First he reached accords with several dozen of Saudi Arabia’s richest men, including ministers and family members. They were arrested in November and held until they agreed to part with significant chunks of their wealth, which freed them from their luxurious captivity in the Riyadh Ritz-Carlton.
And now the crown prince is going after bin Laden — of course not the Al-Qaida founder killed by U.S. Navy SEALs in 2011, but the family company, construction giant Saudi Binladin Group.
Last week Reuters broke the story, reporting that Riyadh had seized management control of the company from bin Laden family members who were “swept up in an anti-graft drive.”
Osama bin Laden was part of that family, but the company cut ties with him.
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At its peak, Binladin Group, founded in 1931, employed more than 100,000 people in 537 companies. Mohammed bin Salman’s takeover began in January, when he forced the company to shake up its board of directors, adding two Mohammed cronies.
Binladin Group is now set to hand over 35 percent of its shares to the state, losing its status as a family-owned publicly-traded company. It will become subject to the indirect management of Mohammed.
Binladin Group will be laying off thousands of people, selling some of its companies, and taking part in infrastructure projects and projects the government favors, like the future city of Neom to be perched on the borders of Saudi Arabia, Egypt and Jordan.
The company was harshly criticized in 2015 when a crane it was operating near the Great Mosque of Mecca collapsed and killed 107 people. Binladin Group was kicked off government projects and eventually had to delay paying salaries and meeting its debts. After the arrest of top people, and with the threat of seizure floating above it, the company didn’t have many choices.
Binladin Group isn’t the only mega-company Riyadh has seized. Mohammed has also laid his hands on the assets of Waleed al-Ibrahim, the chairman of regional TV broadcaster MBC. Ibrahim was forced to hand over a majority stake in that company in exchange for his freedom. This week the Saudi government let Ibrahim leave the country for Dubai, where his company is based.
The Saudi state reached a similar arrangement, though probably a much more expensive one, with the multibillionaire Alwaleed bin Talal.
The government’s stated objective of seizing assets is to end the deep corruption that helped win the owners vast wealth. Still, it takes a lot of courage to target companies that spent generations with close links with the royals themselves.
The crown prince had no guarantees that these extremely rich men would agree to his “compromises” rather than tap the Saudi courts (or international ones) to protect their rights. But the prince, who has made a terrific impression in the United States and elsewhere in the West, as a liberal leader with a modern vision, knows how to hit back at people he claims robbed the kingdom.
Yet predictions of Mohammed provoking Saudi business leaders to rise against him haven’t panned out. The capitalists apparently realize they’d better work with the prince lest they lose what they have left; they may also still hope to win projects in the future, albeit at narrower margins.
A different question is whether foreign investors will keep putting money into Saudi Arabia, where assets could suddenly get nationalized if the prince ever decreed it. Based on reports in the Saudi business press, foreign investments have not dried up, nor are there signs of it slowing.
The temptations of investing in Saudi Arabia may be too great for the multinationals to steer clear of the country. Not a company in the world wouldn’t love a chunk of Mohammed’s dream future city, where $500 billion is expected to be invested, or a chance to build resorts on 50 Saudi islands in the Red Sea at a cost of tens of billions.
Nor does the crackdown on Saudi human rights activists, some of whom were arrested this week for allegedly collaborating with foreign governments and harming the kingdom, seem to have dismayed foreign companies. Not even allegations that these activities were being run from embassies provoke a reaction from the countries involved.
The Saudi vision involves diversifying income sources and reducing the kingdom’s dependence on oil. Those aren’t new goals, but they’ve been redefined by each royal family over the decades. This time there seems to be at least a chance that the vision will turn into a strategic plan supervised directly by the kingdom’s leader.
The plan isn’t confined to shaking down the rich or seizing companies; it involves boosting employment for Saudis at the expense of foreign workers, developing tourism beyond religious tourism, increasing the percentage of women working and updating the universities’ syllabuses so students can learn professions relevant to the labor market.