Saudi state to 'take control' of Binladin group after chairman's arrest

#SaudiPurge

Riyadh considers 'possible transfer' of group's assets while chairman and other family members are in held in corruption crackdown

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Thursday 11 January 2018 15:31 UTC
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Saudi Arabia is taking managerial control of the Saudi Binladin Group and discussing a possible transfer of some of the construction giant's assets to the state while its chairman and other family members are in detention, sources have told the Reuters news agency.

Binladin, which had over 100,000 employees at its height, is the biggest builder in the country and important to Riyadh's plans for large residential, industrial and tourism projects to help diversify the economy beyond oil.

However, the group has been hurt in the past couple of years by a slump in construction and a temporary exclusion from new state contracts after a crane accident killed 107 people at Mecca's Grand Mosque in 2015. It is run by the Bin Laden family, but the company stresses it has no ties with the late al-Qaeda leader Osama Bin Laden.

Riyadh's move comes after the government, under the direction of the crown prince, Mohammed bin Salman, arrested scores of senior officials and businessmen in October for "corruption". The Binladin group's chairman Bakr bin Laden and several family members were arrested in that crackdown.

Saudi officials are trying to negotiate settlements with those accused, saying they aim to claw back some $100bn of funds that rightfully belong to the state. The talks on Binladin's future are part of this effort, the sources said.

Since the detention of Bin Laden family members, the finance ministry has formed a five-member committee, including three government representatives, to oversee the group's business and handle relations with suppliers and contractors, the sources said.

Binladin executives did not respond to phone calls seeking comment. Finance ministry officials and the government media office also did not respond to requests for comment.

Setting a precedent?

Although ownership of Binladin currently remains with the family, the group is in negotiations with the government about the potential transfer of some assets to the state, or possibly reducing or eliminating the government's outstanding debts to Binladin, the sources said.

One banking source with detailed knowledge of the group said the debt might total around $30bn - the legacy of a period about 18 months ago when the government held off from settling many of its debts as its finances were hurt by low oil prices.

It is not clear whether the government's handling of Binladin may set a precedent for the cases of other businessmen held in the corruption purge.

They include one of the kingdom's most prominent businessmen, Prince Alwaleed bin Talal, who is chairman and owner of global investment firm Kingdom Holding.

Because of Binladin's strategic importance to development projects, as well as its financial struggle, it may be treated differently from the assets of other suspects.

The new management committee's government representatives include Abdulrehman al-Harkan, a former chief executive of Saudi property company Dar al-Arkan, and Khaled Nahas, a board member of petrochemical producer Saudi Basic Industries, the sources said.

There are also two family members on the committee: Yehia bin Laden and Abdullah bin Laden.

Previously, the family was in total control of the group, with Bakr bin Laden taking most decisions, the sources said.