Saudi Banks Begin Freezing Accounts Of Arrested Royals, Private Jets Grounded

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Originally appeared at Zero Hedge

Two days after the most stunning purge in recent Saudi history, the so-called “anti-corruption probe” – which was really a countercoup – that led to the arrest of dozens of Saudi Arabian royals, ministers and businessmen allowing Mohammed to further cement control over the Kingdom, appeared to be widening on Monday when, as Reuters reports, Saudi banks begun freezing the accounts of those arrested. The Saudi central bank ordered commercial banks to freeze the accounts of people under investigation in the probe, the Reuters sources said, adding that the number of accounts affected could run into the hundreds, although the names of those affected have yet to emerge.

“The freezing of accounts has already happened,” said another source. “The freezing is a precautionary measure that will end as soon as the suspects are either charged or pronounced innocent.” Considering that prince Alwaleed alone has over $19 billion in assets, including nearly a billion dollars in jewelry, plans, yachts, furniture and cash…

Saudi Banks Begin Freezing Accounts Of Arrested Royals, Private Jets Grounded

… the local central banks may have “accidentally” found an unexpectedly efficient way of refilling Saudi’s dwindling foreign reserve account.

At the same time, fears of a broader crackdowns were spreading, and as Bloomberg reported this morning, the Olayan family, which runs one of Saudi Arabia’s biggest conglomerates, is putting plans to sell shares in some of its local assets on hold “amid slow economic growth in the kingdom.” What it means is that right now it is a good idea to keep a very low profile.

Olayan Financing Co., which controls the billionaire family’s investments in the Middle East, decided not to proceed with an initial public offering of a holding company of about 20 local units, the people said, asking not to be identified because the discussions are private. Plans for the sale of the holding company, which may worth as much as $5 billion, could be revived in the future, they said.

Olayan had been working with Saudi Fransi Capital on the planned sale that could have happened as early as next year, people familiar with the matter said in March. It’s also working with HSBC Holdings Plc’s local unit on the 30 percent sale of its Health Water Bottling Co., people said in May. The IPOs would be the first time Olayan Financing sold shares in one of its Saudi businesses since at least 2000. The family still plans to proceed with the IPO of its water business, the people said.

Such fears appear justified, because as Reuters writes, the crackdown continued on Monday when the founder of one of the kingdom’s biggest travel companies was reportedly detained. Al Tayyar Travel plunged 10% in the opening minutes after the company quoted media reports as saying board member Nasser bin Aqeel al-Tayyar had been held by authorities. The company gave no details but online economic news service SABQ, which is close to the government, reported Tayyar had been detained as part of the anti-corruption probe.

Many more are coming: the front page of leading Saudi newspaper Okaz challenged businessmen on Monday to reveal the sources of their assets, asking: “Where did you get this?” in bright red text. Another headline from Saudi-owned al-Hayat warned: “After the launch (of the anti-corruption drive), the noose tightens, whomever you are!”

Meanwhile, to prevent royals from quietly fleeing the country, a no-fly list has been drawn up and security forces in some Saudi airports were barring owners of private jets from taking off without a permit, pan-Arab daily Al-Asharq Al-Awsat reported.

And as the crackdown extended, so did the confusion, and many analysts were puzzled by the targeting of technocrats like ousted Economy Minister Adel Faqieh and prominent businessmen on whom the kingdom is counting to boost the private sector and wean the economy off oil.

“It seems to run so counter to the long-term goal of foreign investment and more domestic investment and a strengthened private sector,” said Greg Gause, a Gulf expert at Texas A&M University. “If your goal really is anti-corruption, then you bring some cases. You don’t just arrest a bunch of really high-ranking people and emphasize that the rule of law is not really what guides your actions. It just runs so counter to what he seems to have staked quite a lot of his whole plan to.”

Robert Jordan, former U.S. Ambassador to Saudi Arabia, says on Bloomberg TV, said that the Saudi Crown Prince’s anti-corruption drive, which included detaining Prince Alwaleed bin Talal, was “almost the equivalent of arresting Bill Gates.”

The Saudis have come to a fork in the road and they have taken it,” he said adding that “this is about the most breathtaking revelation I think we could possibly have imagined.

The reforms have been well-received by much of Saudi’s overwhelmingly young population, but caused resentment among some of the more conservative old guard, including parts of the Al Saud dynasty frustrated by Prince Mohammed’s meteoric rise. “It’s overkill – and overkill in a way that makes it harder to achieve his long-term objectives,” said Gause.

Meanwhile, in a more troubling escalation, overnight The Saudi-led military coalition said on Monday it would temporarily close all air, land and sea ports to Yemen to stem the flow of arms from Iran to Houthi rebels after a missile fired toward Riyadh was intercepted over the weekend.  Saudi Arabia has been involved in a two-year-old war in Yemen, where the government says it is fighting Iran-aligned militants, and into a dispute with Qatar, which it accuses of backing terrorists, a charge Doha denies. Detractors of the crown prince say both moves are dangerous adventurism. Saudi’s focus now appears to have turned to Iran, and with the war drums beating louder, some wonder how long before the increasingly chaotic events in Saudi Arabia lead to another Middle-east war.

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  • Zainab Ali

    arrogance of hell perm dwellers is equal to the pharoahs of the past

  • Pave Way IV

    Goodbye, KSA. I only hope your head-choppers get to you before you escape. The blood is in the water in KSA – you didn’t think your homicidal Wahhabi sharks would just sit at home and watch the kingdom fall on YouTube and Facebook, did you? Hope you have good neck insurance.

  • Garga

    And in a non-stop media bombardment, they pretend like they really are fighting corruption because he arrested his cousins and other family members.
    Such instant move sits nicely with MbS mentality. No doubt it’s his own brainchild. Wahhabi clerics are deeply dividend by this move, some of them openly support it and most don’t openly support it which in this atmosphere means they’re against it but afraid to talk.

    Anyway, such knee-jerk moves are the result of MbS’s weak position and his knowledge of it. Saudi family are against his kingship but so far he managed to kill or detain the most suitable candidates who were a danger to his rule, but it won’t finish here and his opponents will not seat silently. With this recent move they’ll have no choice but openly challenge him. This too is extremely dangerous because it may result in a civil war and the side who manages to entice the support of nutjobs will have an advantage.

    With an unemployment rate of well over %30-35 and a young population and no certain loyalty from the regular army and a foggy situation regarding the national guard (they removed prince Met’ab-bin-AbdulAziz-AlSaud, the head of NG yesterday), MbS will have little choices. Guess who remains for to back him in case of an armed conflict with his challengers?

    Anyway, if it comes to that, it will be extremely dangerous for the countries of the region, specially Jordan and Qatar and such conflict will no doubt drags Iran into the theater, as one of the first moves (by any side) will be to secure the eastern part of the kingdom which holds the most part of country’s oil and it’s population is majority Shi’a. In that case it doesn’t matter if Iran really helps those Shi’as or not. It will be the best excuse to have a war with Iran by any party interested.

  • Bru

    Sitting with popcorn, enjoying the stupidity of MbS who is destroying the kingdom of terrorism from within out…

  • ALEPPO327

    Do you think that the young prince will eventually go to war with Iran?

    • You can call me Al

      Yes, but a battle not a war because they will be annihilated.

    • Garga

      No way.
      He won’t start a direct war with Iran. They try to continue the current situation (Iraq, Syria and probably Lebanon) because they think it weakens Iran like it weakened them.

      Just notice that for some reason, Saudi oil pipeline from the eastern shore to the red sea is not working. It means almost all of Saudi oil export needs to pass the strait of Hormuz.
      That is also the case for UAE, which for some other reason never finished their proposed pipeline to pass the strait. Kuwait also sits firmly there, with all of it’s oil export passing through the strait.

      Who do you think is able to compensate for the Saudi, Emirati and Kuwaiti oil reduction, instantly?
      Not to mention it will also affect Iran, Iraq and Qatar’s exports to a high degree. So the world is short some 20 million b/d of oil and about %35 of it’s LPG. Not a pretty sight.

      • ALEPPO327

        I do agree with you that it’s very unlikely, dangerous and illogical that the prince will start another gulf war.
        But he is outstretching his luck and playing a dangerous and unnecessary game right now.
        And it would be very ugly if his vainglory lead to a war with Iran, as Iran was boasting a couple of years ago that in case of a war they could wipe out Tel Aviv and destroy gulf water infrastructure in 30 minutes.

  • You can call me Al
  • Rodger

    $20 billion is 2 months of feeding the Saudi plebs.

  • Lex

    This is the fallout of the Saudi oil bonanza finally running out – just like in the USA, when the manufacturing is gone and the debt is maxed out, the kleptocracy starts to devour state funds and then out-of-favour rich people. The Saudis don’t have as much power as the US, so they can’t simply steal foreign assets of governments and individuals through “sanctions” and “anti-corruption measures”, which is why they are looting the wealth of the rich there quicker. This will happen eventually in the USA, but for now the money tree is still producing fake dollars. Another big mistake of the Saudi “Kingdom” was to fund jihadis and try to be a military power in Yemen, both of which hastened the bankruptcy of the old robed crooks. Remember, a “Kingdom” which is supposed to be rich beyond all measure shouldn’t need to put their oil company up for sale – this was a big red flag for vulture capitalists. I remember reading a year or two below that some of the oil wells over there were turning up high water content – a sign that they are running dry. Many people thought that “peak oil” was a hoax, but they misunderstood the significance of it. What it was indicating was that traditional oil sources will be drying up, requiring deep sea drilling or tar sands to continue to rape of the earth – ie, not the end of oil as such, but the end of easy to drill oil which essentially means it becomes too expensive to bother with. Fracking is a good example – the extent to which fracking has been subsidized and had price manipulation has been covered up, and a market is desperately needed for this water-guzzling, earth-ruining disaster to make some real money – hence the attempt to force Europe to buy this over-priced junk instead of good old Russian gas. Anyway, this is the beginning of the end of the “Kingdom” of terror, greed and imperialist collaboration – about bloody time, too.

  • zencowboy61

    Night of the long knives for Saudi’s. Got to get the ducks lined up in a row before the forced attack on Iran..Looks like the jews are using the saudis as their next pawn to fall as they use them up and throw them away. saudi are frauds anyhow …their history is as foggy as a london spring night…the british installed these puppets in the last century.