Alwaleed, Caught in Saudi Purge, Has Assets Across the World
(Bloomberg) -- When Prince Alwaleed bin Talal was arrested as part of an anti-corruption probe in Saudi Arabia, it was the latest twist in the story of a billionaire who has courted international attention -- while cloaking his investments in secrecy.
Alwaleed is among the 11 princes, four ministers and dozens of current or former senior officials arrested on orders from a newly established anti-corruption committee headed by Crown Prince Mohammed bin Salman, said a senior Saudi official who spoke on condition of anonymity. The wealthiest of the arrestees, Alwaleed was picked up from his desert camp, the official said. Authorities didn’t disclose the allegations that prompted the action.
Despite his being the 50th-richest person in the world, with a $19 billion fortune according to the Bloomberg Billionaires Index, details on the source of Alwaleed’s wealth must be gleaned from his public statements, the website of his holding company and company filings. Often his transactions and assets are disguised by investing through funds that obscure the ultimate beneficiary.
Known internationally for investments in companies including Citigroup Inc. and Apple Inc., Alwaleed, 62, hasn’t hesitated to flaunt his wealth. He bought his own A380 superjumbo jet in 2007, planning to kit it out as a “flying palace.” He also launched legal action against Forbes magazine for undervaluing his worth in 2013, before settling the case in 2015. He was a vocal critic of Donald Trump during the U.S. presidential election last year. He later sold the A380 before taking ownership of it, and sought to reconcile with Trump after he was elected president.
“A suspect’s position or status does not influence the firm and fair application of justice,” Sheikh Saud Al Mojeb, attorney general of Saudi Arabia, said in a statement announcing the investigations, without naming names.
Alwaleed’s 95 percent-owned investment vehicle, Kingdom Holding Co., is listed on the Saudi stock exchange and has a market value of about $9 billion. Still, details on the investments he has made or the returns they generate are scarce. Kingdom Holding’s latest annual report barely refers to its stake in Citigroup, for example, even though the prince has said he is one of the biggest single investors in the bank.
Kingdom Holding is continuing its usual commercial operations and has assurances of support from the government, the company said in a statement. The shares tumbled 12 percent since the arrests were announced.
Some of his highest-profile stakes may take a beating in trading Monday unless more is heard from them or Alwaleed, said Joice Mathew, head of equity research at United Securities in Muscat.
Here’s what’s known about Alwaleed’s investments.
Kingdom Holding has held Citigroup shares since 1991, according to its website, increasing its stake during the bank’s 98 percent plunge amid the 2008-2009 financial crisis. Citigroup’s latest proxy filing doesn’t include Alwaleed or Kingdom Holding among the two investors that own more than 5 percent of the company. The prince was a vocal backer of Vikram Pandit, the chief executive officer brought in to help turn Citigroup around, although he also told Fox News in a 2010 interview that the “honeymoon is over” for Pandit and that investors wanted to see results.
Alwaleed long has been a vocal shareholder, encouraging the lender to rebuild its Saudi Arabian business more than a decade after it lost a key banking license there. Citigroup will reopen in the kingdom later this year after a 13-year absence. Citigroup CEO Michael Corbat met the prince in Riyadh in March to discuss the bank’s future plans. The company declined to comment.
Technology and Entertainment
Alwaleed invested $300 million in Twitter in 2011 for what Kingdom Holding’s website says was a “substantial position” in one of social media’s most powerful platforms. He currently owns 4.9 percent of Twitter, according to a regulatory filing by the San Francisco-based company in February. In an interview on CNBC Arabia in October, he said Twitter may face some difficulties, though his investment was close to breaking even and he was optimistic about the outlook. Alwaleed has pared his investment from 5.1 percent in December 2015. The company declined to comment.
Alwaleed bought 6.23 million shares, or 5 percent, of the computer and mobile-device maker for $115.4 million in 1997. He made these purchases between mid-March and April of that year while the company was still struggling to turn itself around. He has since continued to hold the stake while Apple’s valuation has soared to as high as $900 billion. The company didn’t immediately respond to comment.
In 2015, Kingdom Holding was among a group of investors that bought a 5.3 percent stake in the California-based ride-hailing company, valued at $247.7 million. Lyft’s major investors, Andreessen Horowitz and Founders Fund, also sold a portion of their shares in the company to Alwaleed last year. The company didn’t immediately respond to request for comment.
21st Century Fox
As of Dec. 31, 2015, the prince held 39.7 million shares, or a 4.98 percent stake, in Rupert Murdoch’s media and entertainment company. That’s lower than the 6.6 percent holding he had in the company as of the end of 2013, according to regulatory filings. Kingdom press releases as recent as last month mentioned that it still owns a stake in Fox, though it no longer appears in Bloomberg data as a reporting holder. Fox declined to comment.
In 2011, while a leading stockholder at Rupert Murdoch’s News Corp., he called for the departure of top executive Rebekah Brooks amid a phone hacking scandal in the U.K. Three years later, he voted with the Murdochs as shareholders tried to dilute family control over the business. He sold most of his stake in 2015.
Alwaleed has been investing in e-commerce and technology companies for a number of years as demand for technology and Internet services increases. In 2013, Kingdom Holding led a group of investors in buying a stake in a Chinese online retailer, now called JD.com, that was valued at $400 million. JD.com said it had raised a total of $700 million from investors, also including a Canadian pension fund and some major shareholders, in addition to Kingdom Holding. The company didn’t immediately respond to a request for comment.
Through Kingdom Holding and its Kingdom Hotel Investments unit, Alwaleed has made substantial investments in some of the world’s grandest hotels and biggest operators. Kingdom’s portfolio of luxury hotels includes a controlling interest in the The Plaza in New York, the Savoy Hotel in London and the George V in Paris, according to its website. Kingdom Hotels has a 5.7 percent stake in Accor SA, Europe’s biggest hotel operator, according to data compiled by Bloomberg. Accor declined to comment.
Alwaleed owns significant stakes in Saudi companies across the real estate, retail and petrochemical industries. Most recently, Kingdom Holding acquired a 16.2 percent of Banque Saudi Fransi from Credit Agricole SA in September. The $1.5 billion deal makes Kingdom Holding the biggest shareholder in Saudi Arabia’s fifth-largest bank. Saudi Fransi didn’t respond to requests for comment.
It is the latest addition to a domestic portfolio that also includes a 33 percent stake in Jeddah Economic Company, which is developing a real estate project in Jeddah that is set to include the world’s tallest building. Other assets include the Kingdom Tower in Riyadh, which includes one of the tallest towers in Riyadh and a Four Seasons hotel. Other investments include a 34 percent stake in Flynas, a budget airline that was considering an initial public offering this year, and a stake in food-producer Savola.
©2017 Bloomberg L.P.