Saudi Arabia moves to reassure investors in wake of anti-corruption crackdown
Economic council headed by Crown Prince says rights of those under investigation will be upheld
Saudi Arabia moved to quell investor fears on Wednesday, saying it is committed to safeguarding the rights of investors in the wake of an anti-corruption campaign that has seen the detention of prominent businessmen including the billionaire Prince Alwaleed bin Talal.
The country's council of economic affairs, presided by its Chairman Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud, also stressed that the Saudi Arabian government was committed to protecting the rights of individuals under investigation.
"The Chairman of the Council instructed the relevant ministers to ensure that national and multinational companies operating inside and outside the Kingdom, including those wholly or partly owned by individuals under investigation, were not disrupted while investigations into corruption were underway," according to an official statement carried by the state-run news agency SPA.
"The Council recognised the importance of these companies for the national economy, and the importance of ensuring that investors could operate with confidence in Saudi Arabia."
In conjunction with the council's committment to safeguard the rights of individual and corporates, Saudi Arabia's central bank, Saudi Arabian Monetary Authority (SAMA) said the suspension of bank accounts of persons of interest is in response to the Attorney General's request pending the legal cases against them.
"Concerned individual accounts rather than their corporate businesses have been put in suspension until final court rulings," SAMA said. "In other words, corporate businesses remain unaffected. It is business as usual for both banks and corporates. Also, SAMA would like to reiterate that there are no restrictions on money transfers through proper banking channel."
The move to tackle corruption comes as the country takes a host of measures to revive its economy following several years of low oil prices that had curtailed job creation and growth. The measures include a reduction of energy subsidies, plans to raise taxes such as a value added tax and selling off state assets including a 5 per cent stake in Aramco, the world's biggest oil producer which is estimated to raise as much as $100 billion.
Shares of Kingdom Holding Company (KHC), the investment vehicle of billionaire businessman Prince Alwaleed, dropped to the lowest level on Tuesday since December 2011, following reports of his detention and other prominent figures amid the anti-corruption crackdown in the country. The company, which is 95 per cent controlled by Alwaleed, saw its share price plunge 9.78 per cent by mid-day on Tadawul to 8.12 riyals, as investors continued to react to reports of his prolonged detention and other high profile individuals in the wake of an investigation launched by a newly established anti-corruption committee. The company’s share price had dropped to 7.85 riyals on December 18, 2011.
The prince's net-worth has declined by more than $1.3 billion in the past two days. Meanwhile the Saudi Tadawul market had declined as much as 3 per cent on Tuesday before closing down 0.7 per cent.
Updated: November 8, 2017 01:11 PM