An anti-corruption probe that has purged Saudi Arabian royals, ministers and businessmen appeared to be widening after the founder of one of the kingdom’s biggest travel companies was reportedly detained.
The Saudi stock index was down 1.1 percent in early trade on Monday, and Al Tayyar Travel 1810.SE plunged 10 percent in the opening minutes, after the company quoted media reports as saying board member Nasser bin Aqeel al-Tayyar had been held by authorities.
The company gave no details but online economic news service, SABQ, which is said to have close ties to the government, reported Tayyar had been detained in an investigation by a new anti-corruption body headed by Crown Prince Mohammed bin Salman.
Dozens of people have been detained in the crackdown, which has consolidated Prince Mohammed’s power while alarming much of the traditional business establishment. Billionaire Prince Alwaleed bin Talal, Saudi Arabia‘s best-known international investor, is also being held, officials said during the weekend.
The front page of leading Saudi newspaper Okaz challenged businessmen on Monday to reveal the sources of their assets, asking: “Where did you get this?” in bright red text.
Another headline from Saudi-owned al-Hayat warned: “After the launch (of the anti-corruption drive), the noose tightens, whomever you are!”
A no-fly list has been drawn up and security forces in some Saudi airports were barring owners of private jets from taking off without a permit, pan-Arab daily Al-Asharq Al-Awsat reported.
Among those detained are 11 princes, four ministers and tens of former ministers, according to Saudi officials.
The allegations against the men include money laundering, bribery, extorting officials and taking advantage of public office for personal gain, a Saudi official told Reuters. Those accusations could not be independently verified and family members of those detained could not be reached.
A royal decree on Saturday said the crackdown came 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”.
The new anti-corruption committee has the power to seize assets at home and abroad before the results of its investigations are known. Investors worry that the crackdown could ultimately result in forced sales of equities, but the extent of the authorities’ intentions was not immediately clear.
Analysts said the arrests were also a pre-emptive measure by the 32-year-old crown prince to remove powerful figures as he seeks to reshape the economy and society of the world’s leading oil exporter.
Prince Miteb bin Abdullah was detained and replaced as minister of the powerful National Guard, a pivotal power base rooted in the Kingdom’s tribes. That recalled a palace coup in June which removed his elder cousin, Mohammed bin Nayef, as heir to the throne and interior minister.
The moves consolidate Prince Mohammed’s control of the Kingdom’s internal security and military institutions, which had long been headed by separate, powerful branches of the ruling family.
Yet many analysts were puzzled by the targeting of technocrats like removed Economy Minister Adel Faqieh, and prominent businessmen on whom the Kingdom is counting to boost the private sector and wean the economy off oil.
“It seems to run so counter to the long-term goal of foreign investment and more domestic investment and a strengthened private sector,” said Greg Gause, a Gulf expert at Texas A&M University.
“If your goal really is anti-corruption, then you bring some cases. You don’t just arrest a bunch of really high-ranking people and emphasize that the rule of law is not really what guides your actions. It just runs so counter to what he seems to have staked quite a lot of his whole plan to.”
Over the past year, Prince Mohammed has become the ultimate decision-maker for the Kingdom’s military, foreign, economic and social policies, championing his “Vision 2030” plan which includes subsidy cuts, tax rises, sales of state assets, a government efficiency drive and efforts to spur foreign investment.
The reforms have been well-received by much of Saudi’s overwhelmingly young population, but caused resentment among some of the more conservative old guard, including parts of the Al Saud dynasty frustrated by Prince Mohammed’s meteoric rise.
“It’s overkill – and overkill in a way that makes it harder to achieve his long-term objectives,” said Gause.
The line between public funds and royal money is not always clear in Saudi Arabia, an absolute monarchy ruled by an Islamic system, in which most laws are not systematically codified and no elected parliament exists.
WikiLeaks cables have detailed the huge monthly stipends that every Saudi royal receives, as well as various money-making schemes some have used to finance lavish lifestyles.
Many ordinary Saudis have praised the round-up of princes and ministers as long-awaited and necessary to modernize the economy.
In September, King Salman announced that a ban on women driving would be lifted, while Prince Mohammed is trying to break decades of conservative tradition by promoting public entertainment and visits by foreign tourists.
He has also slashed state spending in some areas and plans a $300bn sale of state assets, including floating part of state oil giant Saudi Aramco [IPO-ARMO.SE] on international markets.
But the prince has also led Saudi Arabia into a two-year-old war in Yemen, where the Saudi government says it is fighting Iran-aligned fighters, and into a dispute with Qatar, which it accuses of backing terrorists, a charge Doha denies. Detractors of the crown prince say both moves are dangerous adventurism.
The Saudi-led military coalition said on Monday it would temporarily close all air, land and sea ports to Yemen to stem the flow of arms from Iran to Houthi rebels, after a missile fired toward Riyadh was intercepted on Sunday.