Saudi authorities are striking agreements with some of those detained in an anti-corruption crackdown, asking them to hand over assets and cash in return for their freedom, sources familiar with the matter said.
The deals involve separating cash from assets like property and shares, and looking at bank accounts to assess cash values, one of the sources said.
Dozens of princes, senior officials and businessmen, including Cabinet ministers and billionaires, have been detained in the graft inquiry at least partly aimed at strengthening the power of Crown Prince Mohammed bin Salman.
These include billionaire Prince Alwaleed bin Talal, one of the kingdom’s most prominent businessmen.
One businessman had tens of millions of Saudi riyals withdrawn from his account after he signed. In another case, a former senior official consented to hand over ownership of four billion riyals worth of shares, the source said.
Eliminating uncertainty goes a long way towards giving the market comfort that the regime is getting its house in order
The Saudi government earlier this week moved from freezing accounts to issuing instructions for “expropriation of unencumbered assets” or seizure of assets, said a second source familiar with the situation.
There was no immediate comment from the Saudi government on the deals and the sources declined to be identified because these agreements are not public.
Analysts said the deals may help end uncertainty about the anti-corruption crackdown but could have an impact on Saudi Arabia’s risk perception among investors.
“Eliminating uncertainty about what the Saudi authorities are going to do goes a long way towards giving the market comfort that the regime is getting its house in order and plugging its deficit,” said Louis Gargour, founder and senior portfolio manager at London-based hedge fund LNG Capital.
Riyadh has been cutting spending while raising taxes and fees to curb a State budget deficit caused by low oil prices. The deficit, which hit $98 billion in 2015, is shrinking but at a high cost to the economy – data in late September showed Saudi Arabia in recession during the second quarter. The Saudi government has in recent years been pressing wealthy individuals to invest more in the kingdom and bring home some of their wealth from overseas.
The US is closely watching the situation in Saudi Arabia, US Treasury Secretary Steven Mnuchin said yesterday.
Asked about agreements to hand over wealth for detainees’ freedom, Mnuchin told CNBC: “I think that the Crown Prince [Mohammed bin Salman] is doing a great job at transforming the country.”