Prince al-Waleed bin Talal is trying to hold onto his company after crown prince’s corruption crackdown
Saudi authorities are demanding at least $6 billion from Saudi Prince al-Waleed bin Talal to free him from detention, people familiar with the matter said, potentially putting the global business empire of one of the world’s richest men at risk.
The 62-year-old prince was one of the dozens of royals, government officials and businesspeople rounded up early last month in a wave of arrests the Saudi government billed as the first volley in Crown Prince Mohammed bin Salman’s campaign against widespread graft.
The Saudi government has disclosed few details of its allegations against the accused, many of whom have since been released from detention in a makeshift prison at the Riyadh Ritz-Carlton after negotiating financial settlements. The $6 billion Saudi officials are demanding from Prince al-Waleed, a large stakeholder in Western businesses like Twitter, is among the highest figures they have sought from those arrested, some of the people familiar with the matter said.
The prince’s fortune is estimated at $18.7 billion by Forbes, which would make him the Middle East’s wealthiest individual. But Prince al-Waleed has indicated that he believes raising and handing over that much cash would be an admission of guilt and would require him to dismantle the financial empire he has built over 25 years, other people said.
Prince al-Waleed is talking with the government about instead accepting as payment for his release a large piece of his conglomerate, Kingdom Holding Co., people familiar with the matter said. The Riyadh-listed company’s market value is $8.7 billion, down about 14% since the prince’s arrest. Kingdom Holding said in November that it retained the support of the Saudi government and that its strategy “remains intact.”
Prince al-Waleed, currently chairman of the company, would want to stay on in a leadership role in the new state-backed company, one person close to him said.
“Keeping [the empire] under his control, that’s his battle,” the person said.
According to a senior Saudi official, Prince al-Waleed faces accusations that include money laundering, bribery and extortion. The official didn’t elaborate.
Salah Al-Hejailan, a lawyer who has worked with Prince al-Waleed in the past and remains in contact with his family, said that “there are no formal accusations” against the prince, and that the prosecutor would only open a judicial case against him if no understanding is reached.
The Saudi government is merely “having an amicable exchange to reach a settlement” with the tycoon, said Mr. Al-Hejailan, adding he wasn’t currently retained by Prince al-Waleed.
A hallway of the Ritz-Carlton Hotel in the Saudi capital, Riyadh, where dozens of royals, officials and businesspeople have been detained since early November.Photo: GIUSEPPE CACACE/Agence France-Presse/Getty Images
The prince has indicated to people close to him that he is determined to prove his innocence and would fight the corruption allegations in court if he had to.
“He wants a proper investigation. It is expected that al-Waleed will give MBS a hard time,” said a person close to Prince al-Waleed, referring to the crown prince by his initials, as many do.
Kingdom Holding, the Saudi Royal Court and the Saudi Embassy in Washington didn’t respond to requests for comment.
Saudi officials have said they expect the state to receive tens of billions of dollars from settlements with those arrested last month. Prince Miteb bin Abdullah, once seen as a leading contender to the throne, paid more than $1 billion to secure his release in a settlement with the government, said senior Saudi government advisers.
The detentions are part of a large-scale shake-up of Saudi society engineered by 32-year-old Prince Mohammed. He is also allowing women to drive next year, opening movie theaters for the first time in decades and orchestrating the public listing of the state’s oil company to raise cash for an economic transformation.
Prince Mohammed has also moved quickly to consolidate power in a royal family in which different branches often ran pieces of the government as private fiefs. In the past two years, the crown prince has taken control of internal security services, national defense and the economy from uncles and cousins who had long been in power.
Prince al-Waleed, a cousin to the crown prince, has never been seen as a contender for the throne because his father, Prince Talal bin Abdulaziz, called for liberal social and political reforms in the 1960s and fell out of favor.
Prince al-Waleed speaking at a press conference in Jeddah, Saudi Arabia, in May.Photo: Amer Hilabi/Agence France-Presse/Getty Images
Like his father, Prince al-Waleed has long been an outspoken advocate for social reforms, such as allowing women to drive. He is also a sort of independent Saudi ambassador to the global business world, amassing big stakes in companies such as Apple, General Motors and News Corp. (all of which he has sold). News Corp is the owner of The Wall Street Journal. Currently, he is a major shareholder in Twitter, the ride-sharing service Lyft, AccorHotels and the Four Seasons Hotel & Resorts. His company’s skyscraper, Kingdom Centre, is one of Riyadh’s most striking landmarks.
Some people close to Prince al-Waleed say they believe his high profile helped turn Prince Mohammed against the tycoon. Kingdom Holding has long acted like an arm of the Saudi state, striking deals that could have also been done by the crown prince or the kingdom’s own sovereign-wealth vehicle, the Public Investment Fund.
On a holiday that took him through nine countries this summer, Prince al-Waleed met the president of Portugal and the prime minister of Albania. In September, he sat down with French President Emmanuel Macron to discuss a “strategic alliance” with France, according to a news release about the meeting issued by Kingdom Holding.
Kingdom had been talking to France’s sovereign-wealth fund, its partner in a $400 million fund to invest in Saudi businesses, about bringing the Saudi government into the deal, people familiar with the matter said, adding there had been no progress on the matter since the prince’s arrest. A spokesman for the French fund declined to comment.
Inside the Ritz-Carlton, Prince al-Waleed has been allowed limited communication, is eating what people close to him call his “diet food” and exercising.
Prince al-Waleed’s arrest took his international business partners by surprise and cast uncertainty over the future of his company. Prince al-Waleed had expressed support for Prince Mohammed’s reform plans, and Kingdom Holding appeared likely to play a role in carrying out pieces of the economic and social change under way. Now the prince’s international business dealings have stalled, though the Kingdom board met in Riyadh on Wednesday, its first publicly announced meeting since Prince al-Waleed’s arrest.
Prince al-Waleed’s media company Rotana had been in talks with French conglomerate Vivendi to set up a joint venture with Saudi Public Investment Fund to sell music and open cinemas in Saudi Arabia, according to people familiar with the matter. But his arrest has scuttled any further discussions, they said. A Vivendi representative confirmed that Prince al-Waleed and Vivendi Chairman Vincent Bolloré held talks but said the venture was “not followed up” and “is not on agenda.”
It appears unlikely Prince al-Waleed had any inkling he was under investigation or faced imminent arrest, according to people close to him.
About a month before the arrests, he sent a text message—reviewed by the Journal—to Bakr bin Laden, the chairman of the massive construction firm Saudi Binladin Group, congratulating him on having been cleared of wrongdoing in relation to a crane collapse in Mecca. Prince al-Waleed told Mr. bin Laden in that message that it was now time to get back to work on the Jeddah Tower, a partnership with Kingdom Holding that would be the world’s tallest building when completed.
The tower remains unfinished. Mr. bin Laden is detained at the Ritz with the prince.
Write to Margherita Stancati at margherita.stancati@wsj.com, Summer Said at summer.said@wsj.com and Benoit Faucon at benoit.faucon@wsj.com
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