Schwarzman and Fink Said to Shun Saudi Investment Conference
(Bloomberg) -- The heads of Blackstone Group LP and BlackRock Inc. are the latest global business leaders to cancel plans to attend an investment conference in Saudi Arabia in the wake of the mysterious disappearance of a prominent government critic in Turkey, according to people with knowledge of the matter.
Neither Blackstone Chief Executive Officer Steve Schwarzman nor BlackRock CEO Larry Fink will now attend the event, dubbed “Davos in the Desert,” the people said, asking not to be identified. Executives including JPMorgan Chase & Co.’s Jamie Dimon and Uber Technologies Inc.’s Dara Khosrowshahi have also dropped out.
Turkish officials allege Jamal Khashoggi, a Washington Post columnist who lived in self-imposed exile, was murdered in the kingdom’s consulate in Istanbul after entering the building on Oct. 2. They now say they have audio and video recordings that show a Saudi security team detained Khashoggi in the consulate before killing him and dismembering his body, the Washington Post reported. Saudi officials say Khashoggi left the building unharmed.
The withdrawals will come as a blow to Saudi Arabia, which has built up close ties with the Wall Street executives. A year ago, Fink was one of the attendees at the first event of its kind where he publicly praised the direction of the Saudi economy. In July, BlackRock received licenses to conduct arranging and advising activities in the securities business in the kingdom.
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, agreed to commit as much as $20 billion to an infrastructure investment fund with Blackstone during a visit to Riyadh last May from President Donald Trump and business leaders, including Schwarzman.
The Blackstone and BlackRock cancellations came just hours after JPMorgan spokesman Joe Evangelisti said Dimon won’t attend the conference in an emailed statement, declining to comment on the reason.
President Trump said in a tweet on Monday that Saudi Arabia’s King Salman denied knowing what may have happened to Khashoggi and that he is “immediately” sending Secretary of State Mike Pompeo to meet the king. King Salman ordered the Saudi public prosecutor to investigate the fate of Khashoggi, a Saudi official told Bloomberg earlier Monday. The probe could result in people being held accountable if the evidence warrants it, the official said.
The finance-industry executives join a range of business leaders to back away from the three-day Future Investment Initiative event, which is intended to showcase Prince Mohammed bin Salman’s modernization plan for the desert kingdom. Treasury Secretary Steven Mnuchin is also facing calls to skip the conference scheduled for Oct. 23-25 in Riyadh.
The event has no links to the World Economic Forum, which hosts an annual summit in Davos, Switzerland.
“Whilst it is disappointing that some speakers and partners have pulled out, we are looking forward to welcoming thousands of speakers, moderators and guests from all over the world,” a spokesperson for the Future Investment Initiative said in an emailed statement.
Herman Narula, CEO of startup Improbable Worlds Ltd., won’t be attending, according to spokesman Daniel Griffiths. Improbable last year raised $502 million from investors led by SoftBank Group Corp, whose planned $100 billion Vision Fund is backed by Saudi Arabia and other investors.
Ford Motor Co. Chairman Bill Ford canceled a multi-stop trip to the Middle East including a planned appearance at the investment conference, Reuters reported, citing the company. Airbus SE CEO Tom Enders has instructed his senior executives to limit the company’s presence at events in Saudi Arabia as a result of the controversy, including telling the head of their defense and space unit, Dirk Hoke, to withdraw his attendance from the Future Investment Initiative, according to a person familiar with the matter.
Billionaire Richard Branson sees the case as a potential game-changer for companies doing business with Saudi Arabia, halting Virgin Group’s talks for the Saudi sovereign wealth fund to invest in a space venture.
“What has reportedly happened in Turkey around the disappearance of journalist Jamal Khashoggi, if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government,” he said last week.
Other confirmed drop-outs now include:
- Viacom Inc. Chief Executive Officer Bob Bakish
- Uber Technologies Inc. CEO Dara Khosrowshahi, who won’t attend “unless a substantially different set of facts emerges”
- Venture capitalist Steve Case, pending “further information”
- Los Angeles Times owner Patrick Soon-Shiong
- HP Inc. executive Joanna Popper
- Andy Rubin, creator of the Android mobile operating system
- Rodger Novak, co-founder of Crispr Therapeutics AG
- Sotheby’s CEO Tad Smith
- KKR’s Joseph Bae and General David Petraeus
- Mastercard Inc. CEO Ajay Banga
The event, unofficially tagged with the “Davos” title, features chief executives like Siemens AG’s Joe Kaeser -- whose engineering behemoth is a “strategic partner” for the conference -- and HSBC Holdings Plc’s John Flint. The gathering is co-hosted by the kingdom’s massive sovereign wealth fund, the Public Investment Fund, and the crown prince, who gave a speech at the event last year and took selfies with attendees. Uber got a $3.5 billion investment from the PIF two years ago.
The Riyadh event is not related the World Economic Forum which holds its annual gathering in Davos.
Siemens’ head of financial media relations, Philipp Encz, said that for now there are no changes to Kaeser’s plans, but the company is “following the situation closely.”
The New York Times, which was a media sponsor of the conference, has pulled out. CNN announced on Friday that it’s withdrawn its participation, while the Financial Times said it wouldn’t partner with the event while Khashoggi’s disappearance remains unexplained. Bloomberg LP, the parent company of Bloomberg News, has also pulled out of the event as a media partner, a spokesperson said.
‘I Am Horrified’
President Donald Trump, who has forged a close relationship with the Saudi rulers, has said the U.S. is investigating the case and lawmakers have threatened to take action against the kingdom. Trump said he’s disinclined to block arm sales to the Saudi government, as senators in his own party have suggested.
Saudi Arabia, the world’s biggest oil exporter, said on Sunday it would retaliate against any punitive measures with even “stronger ones,” according to a statement carried by the official Saudi Press Agency. In a subtle reference to the kingdom’s oil wealth, the statement noted how the Saudi economy “has an influential and vital role in the global economy.”
Mnuchin and International Monetary Fund Director Christine Lagarde told reporters in Bali, Indonesia, on Saturday they still plan to attend. So too does Moelis & Co.’s Ken Moelis, a representative for the boutique investment bank said. Goldman Sachs Group Inc. executives Sheila Patel and Dina Powell still intend to go, according to a person briefed on the firm’s plans.
“Horrifying things have been reported, and I am horrified. But I have to conduct the business of the IMF in all corners of the world,” Lagarde said in Bali, where the annual IMF meetings took place.
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