Middle East

Saudi Arabia arrests 11 princes and sacks head of elite National Guard in ‘unprecedented’ purge

The dramatic purge occurred as Crown Prince Mohammed bin Salman steps up his reform drive for a post-oil era

PUBLISHED : Sunday, 05 November, 2017, 10:48am
UPDATED : Tuesday, 28 November, 2017, 10:33am

Saudi Arabia has arrested dozens of senior figures including princes, ministers and a top business tycoon, in what authorities hailed on Sunday as a “decisive” anti-corruption sweep as the kingdom’s crown prince consolidates power.

Prominent billionaire Al-Waleed bin Talal, one of the world’s richest men, was among the 11 princes arrested late on Saturday, reports said, immediately after a new anti-corruption commission headed by Crown Prince Mohammed bin Salman was established by royal decree.

“Laws will be applied firmly on everyone who touched public money and didn’t protect it or embezzled it, or abused their power and influence,” King Salman said in comments aired on state television. “This will be applied on those big and small, and we will fear no one.”

Separately, the head of the Saudi National Guard, once a leading contender to the throne, as well as the navy chief and the economy minister were replaced in a series of high-profile sackings that sent shock waves through the kingdom. A former HSBC executive has now been installed as economy minister.

For many foreigners, Prince Al-Waleed – whose net worth has been estimated by Forbes magazine at US$17 billion – is the face of Saudi business, appearing frequently on international television and in articles on his investments and lifestyle.

A 2013 Forbes magazine profile described his marble-filled, 420-room Riyadh palace, a private Boeing 747 equipped with a throne, and his 120-acre resort on the edge of the Saudi capital with five homes, five artificial lakes and a mini-Grand Canyon.

He is also known for his outspoken views on politics – making headlines in 2015 when he called Donald Trump a “disgrace” on Twitter during the US election campaign. Trump responded by tweeting that the Saudi prince wanted to control “our politicians with daddy’s money. Can’t do it after I get elected.”

Shares in Kingdom Holding, 95 per cent of which is owned by Prince Al-Waleed, dived 9.9 per cent as the Saudi stock exchange opened on Sunday after reports of his arrest. Al-Waleed also holds stakes in Beijing-based online retailer, the Four Seasons hotel chain, Twitter and ride-hailing firm Lyft.

The breadth and scale of the arrests appears to be unprecedented in modern Saudi history
Kristian Ulrichsen

The dramatic purge occurred amid unprecedented social and economic transformation in ultra-conservative Saudi Arabia, as Prince Mohammed steps up his reform drive for a post-oil era.

Saudi-owned Al Arabiya television reported that the princes, four current ministers and dozens of ex-ministers were arrested as the commission launched a probe into old cases such as floods that devastated the Red Sea city of Jeddah in 2009.

The state-run Saudi Press Agency (SPA) said the commission’s goal was to “preserve public money, punish corrupt people and those who exploit their positions”.

“The breadth and scale of the arrests appears to be unprecedented in modern Saudi history,” said Kristian Ulrichsen, a fellow at the Baker Institute for Public Policy at Rice University. “The reported detention of Prince Al-Waleed bin Talal, if true, would send shock waves through the domestic and international business community.”

The king also replaced Economy and Planning Minister Adel Fakeih with Mohammad al-Tuwaijri, his deputy.

Tuwaijri, formerly vice-minister for economy and planning, had already played a key role in shaping Saudi economic and fiscal policy over the past year, overseeing the programme to privatise US$200 billion of government assets. Before joining the government in May 2016, he was Middle East chief executive for HSBC Holding Plc. He has served as a frequent spokesman for the government’s economic reform plan on television and with Western journalists.

“With this [crackdown], the kingdom heralds a new era and policy of transparency, clarity and accountability,” Saudi Finance Minister Mohammed al-Jadaan was quoted as saying by SPA. “The decisive decisions will preserve the investment environment and boost trust in the rule of law.”

The kingdom’s top council of clerics also lauded the anti-corruption efforts as “important”, essentially giving religious backing to the crackdown.

The kingdom heralds a new era and policy of transparency, clarity and accountability
Saudi Finance Minister Mohammed al-Jadaan

“These things are happening methodically and carefully with lots of pre-planning it seems,” said Paul Sullivan, a Middle East specialist at Georgetown University in Washington. “Some real political operators are mentoring this. If the economy and jobs don’t bring lots of changes there could be some pushback.”

An aviation source said security forces had grounded private jets at airports, possibly to prevent high-profile figures from leaving the country.

The purge came less than two weeks after Prince Mohammed welcomed thousands of global business leaders to Riyadh for an investment summit, showcasing his reform drive that has shaken up the kingdom.

It followed a wave of arrests of influential clerics and activists in September as the 32-year-old prince, often known as MBS, cements his grip on power.

Analysts said many of those detained were resistant to Prince Mohammed’s aggressive foreign policy that includes the boycott of Gulf neighbour Qatar as well as some of his bold policy reforms, including privatising state assets and cutting subsidies.

The latest purge included Prince Miteb bin Abdullah being sacked as the head of the National Guard, an elite internal security force. His removal consolidates the crown prince’s control of the kingdom’s security institutions.

To analysts, Prince Mohammed’s meteoric rise has seemed almost Shakespearean in its aggression and calculation. In June, he edged out a 58-year-old cousin, Prince Mohammed bin Nayef, to become heir to the throne.

At the time, Saudi television channels showed the bearded Prince Mohammed kissing the hand of the older prince and kneeling before him in a show of reverence. Western media reports later said that the deposed prince had been placed under house arrest, a claim strongly denied by Saudi authorities.

Already viewed as the de facto ruler controlling all the major levers of government, from defence to the economy, the prince is widely seen to be stamping out traces of internal dissent before a formal transfer of power from his 81-year-old father King Salman.

At the same time, he has projected himself as a liberal reformer in the ultra-conservative kingdom with a series of bold moves including the decision allowing women to drive from next June.

Foreign diplomats predict that Prince Mohammed, set to be the first millennial to occupy the Saudi throne, could well be in control of Saudi Arabia for at least half a century.

Additional reporting by Reuters, Bloomberg