Saudi Billionaires Scramble To Move Cash Offshore, Escape Asset Freeze

Tyler Durden's picture

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.

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.

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.

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.

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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taketheredpill's picture

Long Gold bathroom fixtures and Sterling Silver Tire rims.

 

Shitonya Serfs's picture

Maybe they can come here and buy more cheesy gold necklaces, watches, bracelets, and stinky cologne, and crotch rockets (rev, rev, rev)

There's a mosque on almost every corner here too now

sixsigma cygnusatratus's picture

Saudis are short on cash?  I can't stop smiling for some reason...

Latina Lover's picture

Short Pedophilia, go long headchoppers.

stacking12321's picture

this news is bullish for bitcoin!

Davidduke2000's picture

sorry arabs do not believe in that crap.

MozartIII's picture

Good!

Of interest to any Arabs. I have a state of the art cash vault with the highest security available. Storage rates are very affordable. Please contact me at SafeIslamCash@gmail.com

 

I can arrange for imidiate, anonymous  transfers!

 

Your saftey, in a desert storm!

 

MozartIII

D Nyle's picture

Time to replace the Nigerian email scam with the Saudi email scam

ChumbaWumba's picture

exactly the use case for valhallacoin.com

Stuck on Zero's picture

Saudi pawnshops are going to fill up with the coolest things ... solid gold Korans, diamond encrusted tableware, AK47s with ruby bejeweled stocks, Lamborghinis with leopardskin upholstery, ivory handled scimitars, and billion dollar stainless steel yachts.

Fred Bear's picture

You jjust won the internet

Luc X. Ifer's picture

Hopefully raghead bitches will start buying frenzy into cryptos, buy cryptos bytches!

Akzed's picture

Peasant skin seats are big in those Lamobos too. And don't foget the zircon-encrusted tweezers.

IvannaHumpalot's picture

the thing is.... you can make diamonds and rubies and sapphires in a lab, so they're not precious anymore. So I can buy a wholesale lot of 30 x 5 carat rubies for about $100 on eBay. Actual real corundum rubies beautiful colour, no flaws, made in a lab. So why I need to pay bajillions for a saudi ruby that the only difference is it came outta the ground?

So It Goes's picture

Damn - I wish I had more cash.  Buy when there is blood in the streets.

SILVERGEDDON's picture

I am cranking up an ICO for Camel Jockey Freedom Coin.

Just hand over all of your oil bucks, and I give you this really cool crypto currency voucher which may be worth a lot some day.

In the interim, I will invest your hard earned ass rape the American consumer petrodollars on a stack of shipping containers full of ammo, some great full auto toys, a few hundred thousand acres to stash it all on, and a Trump wall all round it to keep the riff raff out.

Just call me Satoshiguns. Trust me, I will be a happy guy, and you will be safe.

When the peasants catch up to you Saudi princes in the middle of the desert, no one will hear you scream.

 

Badsamm's picture

Bitcoin camel fucking bitches

TAALR Swift's picture

You just know that this article will trigger Simon Black to urge people -- especially rich people with too much to lose (TMTL) -- to have a Plan B.

Of course, even without people like Simon Black, most rich people have the right mix of common sense and paranoia, to stash a good chunk of their wealth outside their home country. It's called Insurance.

So It Goes's picture

"Long Gold bathroom fixtures and Sterling Silver Tire rims."

I bet that the "supercars of London" videos - by in large the kids of the rich Middle Eastern elite own the exotic cars - will stop.  I can hear the tantrumming already - "Daddy cut off my allowance - Wahhhhh.  I had to sell my Lambo - wahhhhh."

 

Also - maybe this re-emphasizes idea to store physical gold outside the country in which you live - just in case......

 

ultraticum's picture

Serves that one rag-head right for dissing an asset he could only dream about right now.  The only one the State can't sieze . . . .

DisorderlyConduct's picture

A broken bone or two will have anyone singing their hashcode like a bird. 

TAALR Swift's picture

That is why you keep it on an encrypted thumb-drive, in an envelope, offshore, with a large law firm in Hong Kong, Singapore, Cuba, Russia or China. Where KSA/gov agents can't get to it.  You can even keep a portion in each of these countries, to raise the bar sky high.

The Duress Clause given to the Trustee ensures that the Trustee does not hand over anything to anyone, if they think you're being "squeezed".

Smart people also know that if a Power resorts to Medieval torture methods, that you're doomed anyway - regardless of whether you give them what they want.  For such a scenario, you sacrifice a portion, and you make sure that they never know about the rest of the jigsaw puzzle of your crypto wealth.

DisorderlyConduct's picture

People all fall to the least common denominator. They want to live and have their families live. Even if the chance is slim to none they will give their last for the chance.

Or everyone's gonna live like James Bond, jumping over bullets and magically getting past the bad guys by stoically enduring torture so they can remain rich. Pick the reality that sounds most plausible. Enjoy.

Jon_Locke's picture

This could very well be part of the meteoric rise of the cryptos over the last 6 or 8 months.

DisorderlyConduct's picture

That is the first thing I've heard that actually makes sense regarding that rise. The timings right, too.

IvannaHumpalot's picture

makes sense. YOU sir just won the internets

earleflorida's picture

netanyahu to be indicted in coming days

bibi is a threat to the people, whom are growing frustrated every year/month/day by his xenophobic tripe

perhaps this can shed some light on their calling out[ED]?!?

so who will replace 'The May Fly?' at 10 downing!?!

https://www.sott.net/article/367151-Did-they-know-Competence-of-UK-intel...

https://www.sott.net/article/367129-Palestinian-ambassador-to-UK-slams-s...      

hmmmm... so what does 'moon of alabama' say, that zerhedge hasn't already said?

https://www.sott.net/article/367142-Israel-Lobby-in-mourning-at-loss-of-...

Read:    http:www.zionismbook.com/  by Alan Hart

Lumberjack's picture

Queue the Saudi Prince scam...

Dear Sir,

I am a Saudi Prince looking to move hundreds of millions out of the country....

If you give me your bank account information I will transfer it to you and you will be rewarded with 20% plus 29 virgins....

======

Dear Prince, keep the virgins and just send the money on pallets to my temporary address at a facility that looks abandoned. Gotta be careful you know. Please undestand it will take quite a bit of time to count it. When I am done, you will be notified. When you arrive I will meet you at McDonalds and give you the money back minus 20%, which will be donated my favorite charities. The Zero Hedge Charitable Trust and Broadcasting Services, also The William Banzai 7 Galleries of Fine Art, Mrs. Cogs Kitchen and the Hedgless Horseman’s Ranch for Bad Boys and Gals.

Lj

monero's picture

If those Saudi princes had Bitcoin or Monero they wouldn't have been able to have all their accounts frozen.  Wasn't it recently that a prince was on TV bashing Bitcoin?

IvannaHumpalot's picture

More - the bitcoin-bashing prince is under lock and key at the Ritz now. Perhaps he was just talking his book: don't buy bitcoin everyone (meanwhile furiously buying bitcoin)

RagaMuffin's picture

How much gold can you shove up a camel's butt before a run to the border..................

Implied Violins's picture

Their goats are more stretched out...

Falconsixone's picture

I wonder if that guy's the devil......

TalkToLind's picture

Oy vey, those greedy muzzies are behaving just like The Chosen People™!

shankster's picture

My wallet could use a little green.

Rockatanski's picture

if they tell us its just a cash grab, then its more. smoke and mirrors. rot roh rorge.

Mind the GAAP's picture

One of those guys was actually named 'Kamel'.  I shit you not.  

I guess we know who ... or what his mom was banging at the time.

Rex Andrus's picture

Bring that corruption investigation here. Freeze the assets of congress and their families, lobbyists and judges, prosecutors and cops. Fuuuck Yooou Tooooo

TheAnswerIs42's picture

Apparently these wankers are not part of the "Club", else they would have known to start a "Foundation" in another country, like "Canada" and park it over there...

 

Bill of Rights's picture

First we Liquidate the cash then comes more dead bodies.

Panic Mode's picture

You wonder why bitcoin goes to the moon.

samsara's picture

"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."

 

So are they still using the amount of reserves as the same figure they have been using for the last 40 years?

Its amazing they still they have as much as they started while pumping from there since the '60s or before.

GHAWAR is going tits up.     That drives the sale of it.

SadhakaPadma's picture

Bitcoin safe heaven asset for venezuela, saudi arabia...usa next.

Davidduke2000's picture

good luck in buying bitcoin all your eggs in one basket $7500 each.

Gold is more reliable in a crisis and wars and since ww3 is about to happen, anything eletronic will be wiped out.