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Saudi Billionaires Scramble To Move Cash Offshore, Escape Asset Freeze


Originally appeared at Zero Hedge

Over the weekend, Saudi King Salman shocked the world by abruptly announcing the arrests of 11 senior princes and some 38 ministers, including Prince Al-Waleed bin Talal, the world’s sixty-first richest man and the largest shareholder in Citi, News Corp. and Twitter. The purge was orchestrated by a new “supreme committee” to investigate public corruption created by King Salman but under the control of Crown Prince Mohammed bin Salman, who chairs the committee and is widely suspected of being the driving force behind the purge.

Saudi Billionaires Scramble To Move Cash Offshore, Escape Asset Freeze

In addition to the arrests, two Royals have died since the purge began. Prince Mansour bin-Muqrin reportedly perished in a helicopter crash near the Yemen border earlier this week, and Prince Abdul Aziz bin Fahd – killed during a firefight as authorities attempted to arrest him.

For all the chaos, Saudi Arabia is benefiting from the climb in oil prices over the past week. However, signs of stress are showing up elsewhere in regional markets, as Bloomberg points out in a recent piece.

Saudi Billionaires Scramble To Move Cash Offshore, Escape Asset Freeze

Many of the kingdom’s millionaires and billionaires – at least those who haven’t already seen their domestic and foreign accounts frozen by the government – fear that they might be next after WSJ revealed that MbS’s purge may be nothing more than a naked cash grab, as the paper reports that the kingdom is aiming to confiscate cash and assets worth as much as $800 billion.

So, they’re doing what any reasonable rich person would do given the circumstances; they’re liquidating their assets as quickly as possible and stashing their cash offshore until things quiet down.

Some Saudi billionaires and millionaires are selling investments in neighboring Gulf Cooperation Council countries and turning them into cash or liquid holdings overseas, the people said. They spoke on condition of anonymity because of the sensitivity of the matter. In Saudi Arabia, some are in talks with banks and asset managers to move money outside the country, the people said.

Until the surprise arrests of dozens of people last weekend, Saudi Arabia’s elite was the target of Deutsche Bank AG, UBS Group AG, Credit Suisse Group AG and other global banks seeking to manage their wealth. They now find themselves on the run in the face of a campaign that has targeted some of the kingdom’s most prominent princes, billionaires and officials.

To be sure, SAMA – the Saudi Monetary Authority and de facto central bank – has asked lenders in the kingdom to freeze the accounts of dozens of individuals who aren’t under arrest, as well as the assets of those being detained, people familiar with the matter said. The Saudi attorney general said in a statement released Monday that the weekend arrests were only “phase one” of the crackdown.

The selloff across the GCC has cost stocks $17.6 billion as of Wednesday, dragging the collective market capitalization for bourses in the region to $900 billion, according to data compiled by Bloomberg. Kuwait’s SE Price Index has lost 4.4 percent, while Dubai’s DFM General Index fell 4.8 percent. All measures in the region are down for the week with the exception of Oman’s MSM30 Index, which rose 0.3 percent.

Saudi Billionaires Scramble To Move Cash Offshore, Escape Asset Freeze

While some are worried that shifting their money abroad right now might arouse suspicion, others have noted that there’s a lot of GCC money already sitting in accounts in Europe and Asia.

“A lot of GCC money is already sitting outside the GCC region, especially in Paris, Geneva, Zurich and Asia,” said Sergey Dergachev, who helps oversee about $14 billion in assets as a senior money manager at Union Investment Privatfonds GmbH in Frankfurt. “Those centers should remain beneficiaries if more money moves out.”

For the Saudi Royal Family, the arrests are tantamount to killing twohas realized that not only can it crush any potential dissent by arresting dozens of potential coup-plotters, it can also replenish the country’s foreign reserves, which in the past 3 years have declined by over $250 billion as oil prices have plunged from their peak.

Saudi Billionaires Scramble To Move Cash Offshore, Escape Asset Freeze

The crackdown also comes at a time when the Kingdom’s government is seeking to channel the public’s seething anger as unemployment rises and oil revenues – which formally supplied as much as 90% of the country’s budget – tumble. The government has raised tens of billions of dollars from international bond markets and has drawn down on central bank reserves to finance a budget deficit that reached about 15 percent of gross domestic product in 2015. In an attempt to provide a long-term structural solution, MbS has proposed his Vision 2030 initiative, which seeks to diversify the Saudi economy into tourism, transportation and technology industries, among others.

To help facilitate this, the country is seeking to list 5% of state-owned oil giant Aramco – believed to be the world’s most valuable private company – with a valuation of about $1.5 trillion.

Of course, concerns that an all-out war might soon erupt between Saudi Arabia and Iran are also contributing to the drop in regional stocks,especially after King Salman ordered all Saudi citizens to leave Lebanon ‘immediately.’

That follows the sudden resignation of Lebanese Prime Minister Saad Hariri, who announced his resignation during a visit to Saudi Arabia over the weekend.

Saudi’s Arabia’s wealthy should have little trouble moving their wealth offshore if they’re so inclined; the real question, though, is whether they’ll be able to protect those assets from the long reach of SAMA, which has strong relationships with its global banking partners, in the event that they find themselves under arrest.



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  • alejoeisabel


  • Garga

    Well good luck in attracting investors for your “Vision 2030”.

    Just imagine if another country did what Saudis are doing. Presidents Assad and Putin didn’t anything remotely like it and MSM accuses both of them of killing and mass murdering their political opponents.

    It’s first and most to stabilize MbS’s unstable and weak position, removing anybody who has the potential to challenge his rule and then cash grab which is welcomed but not the main goal.
    They also throw a bone for Trump by their ridiculous claim about the missile which gives him an excuse, no matter how lame, to incessantly whine about Iran’s missile program. Saudis learnt from the best at playing victim and demand nobody fights back when Saudis bomb them. They flatly call it aggression by Yemenis!
    It remains to be seen if Europeans (of P5+1) are willing to cooperate with them. Anyway they don’t really need a proof to accuse Iran as they didn’t need it to accuse president Assad about chemical attacks. If they do it, it’ll change a lot of things.

    • Barba_Papa

      It’s the power of having the world’s largest oil reserve underneath your feet and having the power of collapsing the petro dollar. The amount of shit you can get away it is indeed staggering.

  • Langaniso Mhlobo

    Civil war is coming to Saudi Arabia the will and trust has been destroyed by power hungry monarchs.

  • Floyd Hazzard

    Saudi Arabia is headed towards civil war and more economic drainage. When you seize the funds, it a shortsighted measure that cripples the economy eventually through layoffs, selloffs or moving it out of Saudi authorities reach. I predict a lot of self made rich Saudi exiles in the near future. They should all move to Qatar.

  • Rafik Chauhan


  • Omar Huss

    They run away from their head chopper brother with cash to anywhere, just take the money from them and make them feel how to survive while broke. It’s demise of Wahabi/ Zion mafia!

  • Solomon Krupacek

    They could offer 1 billion USD bloodwit for the prince´s life.

  • Real Anti-Racist Action

    I will help these poor fellas out.
    Move all assists into Bitcoin and there you go. You can be in prison 10 years get out remember your security code or numbers and you will still have all of your riches lol
    My fee for this advice is to donate 10-million Dollars to the Lebanese military pronto for us for anti air defense upgrades!