Main wave of arrests in Saudi Arabia's anti-corruption purge is complete, minister says

Some suspects will go to trial but authorities are seeking to reach financial settlements with most, and recouped funds will be used for public needs

LONDON 21st July 2016. Dr.Majid bin Abdullah Al Qasabi, the Minister of Commerce and Investment of Saudi Arabia, speaking at the 2nd GCC-British Economic Forum at Lancaster House in London. Stephen Lock for the National FOR BUSINESS. 
Words: Ben Flanagan  *** Local Caption ***  SL-forum-013.JPG
Powered by automated translation

Saudi Arabia has completed the main wave of arrests in its sweeping crackdown on corruption and is preparing to channel billions of dollars of seized funds into economic development projects, a Saudi minister said.

"As far as I know, this is the case," said minister of commerce and investment Majid bin Abdullah Al Qasabi. "Now the government will not keep its mouth shut when it sees a corrupt case. So definitely it will act. But this is -- in terms of its magnitude, in terms of scale, in terms of how, in terms of why, in terms of now, that's it."

Dozens of princes, officials and businessmen were detained last month and held in the Ritz-Carlton hotel in Riyadh. Around 200 people were questioned  and more than 2,000 bank accounts frozen in the purge, which has strengthened the authority of Crown Prince Mohammed bin Salman.

Some suspects will go to trial  but authorities are seeking to reach financial settlements with most, whereby they paid back a portion of the assets which were  corruptly acquired,and it was revealed last week that the first deals had been done. Senior prince Miteb bin Abdullah, who was once seen as a leading contender for the throne, was freed after agreeing to pay more than  $1 billion (Dh3.67 billion) officials said.

A special ministry of finance account has been opened to receive such funds, which the public prosecutor's office has estimated should eventually total between $50 billion and $100 billion, Mr Qasabi said during a visit to Washington to meet US businessmen.

"This money definitely will be used for housing, for the general public needs, because it is the money for the people. It will not be used for any other issue but for development projects," he added.

The public prosecutor is expected to issue a statement in a few days on the status of the investigation, including how many people remain in detention and how many face legal charges.

Riyadh is seeking huge amounts of investment from the US and other countries  to reduce its dependence on oil exports. Mr Qasabi conceded that American businessmen were somewhat concerned by the potential impact of the crackdown on corruption.

"They're worried about if this is … will be, the end of it or where it will stop," he said. "But they all think this will be good for the country, because the country's leadership showed it is fighting corruption, and ultimately this will be a level playing field for everybody."

The economic reforms include a privatisation programme that is to raise some $300 billion. There has been little concrete progress in the past 18 months as deals have slowed down because of red tape, legal uncertainties and what foreign businessmen regard as high asking prices for assets.

But Mr Qasabi said the programme was on track and the government, having identified which sectors are to be privatised, is working on the complex mechanics of asset transfers which are scheduled to take place by mid-2019, though in some cases it could be sooner. Seaports will be a major area of activity, he said.

The minister chairs a programme that encourages strategic Saudi companies to expand globally in sectors such as food, logistics, pharmaceuticals and petrochemicals, with the government allocating money to help them grow by acquiring other firms locally.

The economy has been hit by low oil prices and government austerity measures in the last couple of years. But thanks to the authorities promising to take steps taken to stimulate the economy, Mr Qatabi said the capital of the Saudi Industrial Development Fund, which makes soft loans to businesses, had increased this year.

More stimulus measures are likely to be announced when the 2018 state budget is expected to be released in late December, or even sooner, he added. Financial incentives offered by the government could total 70 billion riyals ($18.7 billion or Dh68.68).