Saudi Billionaires Scramble To Move Cash Offshore, Escape Asset Freeze

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.


IvannaHumpalot Stuck on Zero Thu, 11/09/2017 - 17:05 Permalink

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?

In reply to by Stuck on Zero

SILVERGEDDON Shitonya Serfs Thu, 11/09/2017 - 18:45 Permalink

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. 

In reply to by Shitonya Serfs

So It Goes taketheredpill Thu, 11/09/2017 - 23:21 Permalink

"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...... 

In reply to by taketheredpill

TAALR Swift DisorderlyConduct Thu, 11/09/2017 - 17:42 Permalink

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.

In reply to by DisorderlyConduct

DisorderlyConduct TAALR Swift Thu, 11/09/2017 - 18:02 Permalink

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.

In reply to by TAALR Swift

earleflorida Jon_Locke Thu, 11/09/2017 - 18:25 Permalink

netanyahu to be indicted in coming daysbibi is a threat to the people, whom are growing frustrated every year/month/day by his xenophobic tripeperhaps this can shed some light on their calling out[ED]?!?so who will replace 'The May Fly?' at 10 downing!?!……      hmmmm... so what does 'moon of alabama' say, that zerhedge hasn't already said?… Read:  by Alan Hart

In reply to by Jon_Locke

Lumberjack Thu, 11/09/2017 - 16:27 Permalink

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.


monero Thu, 11/09/2017 - 15:49 Permalink

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?

Rex Andrus Thu, 11/09/2017 - 16:02 Permalink

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

TheAnswerIs42 Thu, 11/09/2017 - 16:06 Permalink

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... 

samsara Thu, 11/09/2017 - 16:20 Permalink

"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.