It’s an investment summit in the shadow of a killing: Stripped of the glitz and glamour of business titans who last year flew in to woo a young prince and be a part of his grand plans to transform Saudi Arabia’s economy.
Hosted by the kingdom’s sovereign wealth fund, the three-day conference that kicks off in Riyadh today was meant to showcase the opportunities created by efforts to break the economy’s dependence on oil and unveil billion-dollar contracts. That is, until the killing of government critic Jamal Khashoggi prompted dozens of business leaders to pull out.
Crown Prince Mohammed bin Salman, who posed for selfies with hundreds of delegates at last year’s conference, will be keen to show it’s business as usual. After two weeks of denials, the kingdom acknowledged on Saturday that Khashoggi was killed inside its consulate in Istanbul.
Saudi authorities called it an interrogation gone wrong, and King Salman and Prince Mohammed called Khashoggi’s son Salah to offer condolences. But grisly details from Turkey on how the Washington Post columnist allegedly was killed have led foreigners to sell Saudi stocks in record volumes, and political pressure shows little sign of easing.
Reflecting tensions in Washington over how to grapple with a top ally’s behaviour, President Donald Trump said the Saudi narrative was marked by “deception and lies,” but that there remained no proof of the prince’s involvement in Khashoggi’s killing. Senators from both parties have called for an independent investigation and a review of arms sales to the kingdom, a move Trump has said could endanger American jobs.
“The Saudis need to produce Khashoggi’s body,” Ben Sasse, a Republican senator, tweeted yesterday.
German Chancellor Angela Merkel has signalled that exports of military equipment to Saudi Arabia will be suspended while more information is unearthed.
US Treasury Secretary Steven Mnuchin, in Jerusalem on Sunday for the first stop of a Middle East tour, said it was premature to discuss sanctions. He has cancelled his participation in the Saudi investment conference but is still visiting Riyadh.
No-shows from the likes of Deutsche Bank AG’s Christian Sewing, JPMorgan Chase & Co’s Jamie Dimon and BlackRock Inc chief executive officer Larry Fink will deal a blow to the 33-year-old leader and the kingdom, which has built close ties with Wall Street executives and relies largely on global banks to finance its ambitious plans.
Among those who haven’t cancelled is a delegation of Russian CEOs, including at least one billionaire. Kirill Dmitriev, the CEO of the state-run Russian Direct Investment Fund and a leading player in President Vladimir Putin’s push to engage Saudi Arabia, has encouraged business leaders in fields ranging from petrochemicals to diamonds to banking to attend.
“There’s more of a shift toward regional and Asian CEOs as the leadership was determined to hold the event at all costs,” said Ayham Kamel, head of Middle East and North Africa at Eurasia Group. “The Saudi leadership can walk away with an event that neither fails or succeeds, but in a few months, the most important impact on the country will still be a dip in international confidence in the economic reform programme.”
Initially, Saudi authorities said Khashoggi, who moved to the US last year for fear of being caught up in the wave of arrests sweeping the kingdom, had left the consulate shortly after entering to obtain documents he needed to marry his Turkish fiancee.
On Saturday, they said rogue operatives had accidentally killed Khashoggi on October 2 when a discussion at the consulate escalated into a fight. It said 18 people had been detained in the investigation. An adviser to Prince Mohammed and a senior intelligence official were removed from their posts.
The Saudi account was dramatically different from that given by Turkish officials, who said privately that a Saudi hit team flew in to kill and dismember the 59-year-old.
CNN reported yesterday that a Saudi operative left the consulate after the killing dressed in Khashoggi’s clothes and wearing a fake beard. It cited law enforcement footage and a senior Turkish official who said the man was sent as a body double to help cover up the death.
The diplomatic crisis triggered by Khashoggi’s killing has also hurt Saudi Arabia’s plans to attract and retain international stock-market investors, who sold a net $1.1bn in stocks last week.
Last year’s so-called Future Investment Initiative – the first of its kind – gathered some of the finance world’s most influential people in a coming-out party of sorts for the kingdom’s Public Investment Fund. The prince announced plans for a $500bn sci-fi city called Neom and said the country was returning to “moderate” Islam and intended to “eradicate” extremism.
Finance titans such as Blackstone Group LP’s Steve Schwarzman, former HSBC Holdings Plc CEO Stuart Gulliver and BlackRock’s Fink mingled with Saudi leaders as the PIF floated ambitions to become the world’s largest sovereign fund.
Blackstone and the PIF firmed up plans to invest in US infrastructure, with the fund providing a commitment of up to $20bn. In July, BlackRock received licences to conduct arranging and advising activities in the kingdom’s securities business.
SoftBank Group Corp founder Masayoshi Son said he planned to invest in the new city and potentially acquire a “substantial” equity stake in state-controlled Saudi Electricity Co. Son remains one of the few business chiefs who hasn’t pulled out of this year’s event. SoftBank chief operating officer Marcelo Claure has reportedly decided against attending, however, and Schwarzman pulled out, too, according to people familiar with their plans. Siemens CEO Joe Kaeser joined their ranks yesterday.
The PIF closed the 2017 gathering by unveiling plans to invest about $1bn in Virgin Group’s space companies. Billionaire Richard Branson said he was suspending talks with the fund, calling Khashoggi’s disappearance a potential game-changer for companies doing business with Saudi Arabia.

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