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Saudi Arabia hopes to raise $13b by year end from graft purge

Saudi Arabia hopes to raise $13b by year end from graft purge

RIYADH: Saudi authorities expect to raise SR50bn ($13.3bn) for the state’s finances by the end of the year as they complete settlements with the princes and tycoons rounded up in Riyadh’s corruption crackdown, a senior official said. Some cash has already been transferred to the government from suspects who signed agreements to secure their freedom and more deals are being finalised. The settlements involve the suspects handing over deposits, real estate and corporate assets to the state. “By the end of the year, SR50bn will have been paid,” the official said. The crackdown, which saw hundreds of princes and businessmen detained at Riyadh’s Ritz-Carlton hotel, is winding down, with most suspects, including billionaire Prince Alwaleed bin Talal, the highest profile detainee, released. The hotel reopened for business on Sunday after being turned into a detention centre when Crown Prince Mohammed bin Salman launched the crackdown in November. The attorney-general has said the government will eventually raise more than $100bn as all the assets handed over to the authorities are liquidated. Riyadh intends to use that money to help contain its fiscal deficit, which is forecast to hit $52bn this year as the oil-dependent economy has been battered by prolonged low crude prices. Shares in some of the kingdom’s biggest companies, including Saudi Binladin Group, a construction firm, and Middle East Broadcasting Center, the region’s largest television network, are being handed over to the government, people briefed on the matter say. Prince Alwaleed has returned to work at Kingdom Holding Company, his investment vehicle, but no details have been disclosed about the terms of his release. Seized assets are being overseen by a group of government officials and private-equity specialists hired to manage the portfolio, the official said. Assets inside and outside the kingdom, including large amounts of real estate, will need to be sold off over time, he said. “With assets, we need to be careful with the liquidation as we need the market to remain stable,” he said. He added that the government does not intend to hold on to the assets, but is wary of selling them off too quickly at discounted values. “We are in no rush to liquidate, we have plenty of reserves and debt capacity left, there is a good tail wind helping us now,” the official said. Funds raised from the crackdown will be deposited into the central bank’s reserve holdings, he said, which can be drawn down to help cover the deficit.