Saudi billionaire Prince Alwaleed bin Talal owns stakes in hotel properties such as the Four Seasons’ George V hotel, seen above, as well London’s Savoy, New York’s Plaza Hotel and Accor Hotels.
The arrest of Saudi billionaire Prince Alwaleed bin Talal leaves the future of his global investments up in the air, including the Toronto-based Four Seasons luxury hotel chain.
Prince Alwaleed was detained on the weekend, along with other princes and dozens of current and former government officials, in what is being described as an attempt by the heir to the Saudi throne to consolidate power and crack down on corruption.
The billionaire businessman is the highest-profile Saudi to be detained, thanks to his flamboyant style and his large presence in global financial markets. The Four Seasons investment dates back to 2007, when his Kingdom Holding Co. joined forces with the investment firm of Microsoft Corp. co-founder Bill Gates to take a controlling interest in the hotel firm for $3.8-billion (U.S.), including debt. Four Seasons founder Isadore Sharp retained a 5-per-cent interest and remains chairman.
Related: Saudi anti-corruption purge widens as top entrepreneur held
The 62-year-old prince has not been afraid to speak his mind. He sparred with Forbes Magazine over its estimate of his net worth – recently pegged at more than $17.2-billion. He also pushed for women to be allowed to drive in his country and condemned Donald Trump during the presidential campaign over his plan to restrict Muslim entry into the U.S.
It is unclear how the arrest will affect the future of Prince Alwaleed's investments such as the privately-held Four Seasons Hotels and Resorts, of which he owns 47.5 per cent. The Four Seasons and Kingdom Holding Co. did not respond to a request for comment. Mr. Sharp could not be reached for comment.
But the surprising developments have the potential, at least, to affect a wide variety of companies and industries in which Prince Alwaleed is an influential investor. He invested in Citigroup Inc. when the American bank was in deep financial trouble, and has stakes in Twitter, Disney, Apple and Lyft, among others.
Four Seasons, which manages about 100 hotels and resorts across dozens of countries, was founded by Mr. Sharp in the 1960s. The company is a now a hotel-management firm, with other investors typically owning the land and buildings. This includes Prince Alwaleed himself, who owned the new Four Seasons in Toronto until selling it last year for $225-million (Canadian).
Kingdom Hotels also played a major role in the 2006 buyout of another Canadian-based hotel brand, Fairmont Hotels and Resorts Inc.
Last year, the Fairmont chain was acquired by a French company.
In 2013, Prince Alwaleed told Bloomberg News he entertained ideas of taking the Four Seasons management company public. That has yet to happen.
The prince also owns stakes in other hotel properties such as George V, London's Savoy, New York's Plaza Hotel and Accor Hotels.
Prince Alwaleed first made his big splash in Western capital markets in 1991, when he took a stake in American bank Citicorp, which is now Citigroup.
During the 2007-09 financial crisis, he increased his investment in Citigroup as a sign of confidence in the bank.
He took his company, Kingdom Holding Co., public on the Saudi stock exchange in 2007 and issues corporate filings and releases such as annual reports. The stock lost 8 per cent of its value on Sunday. Still, details on the investments he has made or the returns they generate are scarce. Kingdom Holding's latest annual report barely refers to its stake in Citigroup, for example, even though the prince has said he is one of the biggest single investors in the bank.
News of the arrests emerged on the weekend after King Salman ordered the creation of an anti-corruption committee chaired by his 32-year-old favourite son, Crown Prince Mohammed bin Salman. The royal decree said the arrests were in response to "exploitation by some of the weak souls who have put their own interests above the public interest, in order to, illicitly, accrue money."
"A suspect's position or status does not influence the firm and fair application of justice," Sheik Saud al-Mojeb, attorney-general of Saudi Arabia, said in a statement announcing the investigations, without naming names.
Kingdom Holding is continuing its usual commercial operations and has assurances of support from the government, the company said in a statement.
Some of his highest-profile stakes may take a beating in trading Monday unless more is heard from them or Prince Alwaleed, said Joice Mathew, head of equity research at United Securities in Muscat.
Prince Alwaleed owns significant stakes in Saudi companies across the real estate, retail and petrochemical industries. Most recently, Kingdom Holding acquired a 16.2-per-cent stake of Banque Saudi Fransi from Crédit Agricole SA in September. The $1.5-billion deal makes Kingdom Holding the biggest shareholder in Saudi Arabia's fifth-largest bank. Saudi Fransi didn't respond to requests for comment.
It is the latest addition to a domestic portfolio that also includes a 33-per-cent stake in Jeddah Economic Company, which is developing a real estate project in Jeddah that is set to include the world's tallest building. Other assets include the Kingdom Tower in Riyadh, which includes one of the tallest towers in Riyadh. Other investments include a 34-per-cent stake in Flynas, a budget airline that was considering an initial public offering this year, and a stake in food-producer Savola.
With a report from Bloomberg News
Rachelle Younglai