Major Citi-stakeholder Alwaleed arrested by Saudi authorities
Prince Alwaleed bin Talal, the billionaire with significant stakes in Citigroup and Twitter, was arrested by Saudi Arabian authorities as part of an alleged anti-corruption purge in the kingdom.
Alwaleed was among 11 princes and 38 current or former senior officials that were arrested on orders from a newly established anti-corruption committee headed by Crown Prince Mohammed bin Salman, according to a senior Saudi official who spoke on condition of anonymity. Alwaleed was picked up from his desert camp, the official said. Authorities didn't disclose the allegations that prompted the arrests.
Ranked the world's 50th richest person with a net worth of about $19 billion, according to the Bloomberg Billionaires Index, Alwaleed is the founder of Kingdom Holding Co., a Riyadh-based investment company that has holdings in real estate, hotels and stocks such as Apple Inc. around the world. Kingdom Holding shares fell as much as 9.9 percent and closed down 7.6 percent, the lowest since June 2012.
In one of his most visible local investments, Alwaleed in September bought a 16.2 percent stake in Banque Saudi Fransi from Credit Agricole SA in a deal valued at $1.54 billion. Kingdom Holding, which is now the bank's single largest shareholder, bought the stake at a discount after the French lender struggled to find an international buyer. Saudi Fransi shares fell as much as 2.8 percent before closing 1 percent higher. The benchmark Tadawul All Share Index erased losses to close up 0.3 percent.
"There's a good chance that stocks linked to Kingdom Holding, such as Twitter and Citigroup, will be hammered in trading tomorrow unless you see some sort of comment or statement from the companies or Alwaleed himself," said Joice Mathew, head of equity research at United Securities in Muscat. "In the absence of news or details on what kind of corruption this is, we'll see some initial panic, that's for sure."
Alwaleed has long ranked among Citigroup's largest and most outspoken shareholders, encouraging the lender to rebuild its Saudi Arabian business more than a decade after it lost a key banking license there. The bank will reopen in the kingdom later this year after a 13-year absence and lobbying by Alwaleed.
Citigroup Chief Executive Officer Mike Corbat met the prince in Riyadh in March to discuss the bank's future plans. Kingdom Holding has held the stock since 1991, according to its website, a span that included a 98 percent plunge during the 2008-2009 financial crisis. Citigroup shares have since climbed more than sevenfold.
The investment firm has also tended significant stakes in Apple and EBay Inc. for well over a decade. While the website doesn't specify the size of such holdings, Alwaleed's investments are sometimes detailed in regulatory filings. At the end of last year, for example, he exercised voting rights for about 35 million shares of Twitter, most of which he owned directly, according to a February regulatory filing. As of Friday, a stake that size had a $695 million market value — or almost 5 percent of the microblogging website's total.
Alwaleed also holds stakes in Beijing-based online retailed JD.com Inc., the Four Seasons hotel chain and Accor Hotels. Kingdom Holding is also backing a project to build the world's tallest tower in Jeddah. Alwaleed's wealth has declined by more than $700 million so far this year, according to the Bloomberg Billionaires Index.
Separately, Kingdom Holding posted a third-quarter profit of 247.5 million riyals ($66 million) on Sunday after a loss of 355 million riyals a year ago. Revenue rose 76 percent to 550 million riyals.
A spokesman for Kingdom Holding didn't immediately respond to calls and emails seeking comment.