ABU DHABI/DUBAI (Reuters) - Saudi authorities have questioned 208 people in an anti-corruption investigation and estimate at least $100 billion has been stolen through graft, a top official said on Thursday as the inquiry expanded beyond the kingdom’s borders.
“Based on our investigations over the past three years, we estimate that at least $100 billion has been misused through systematic corruption and embezzlement over several decades,” Attorney-General Sheikh Saud al-Mojeb said in a statement.
Of the 208 people called in for questioning so far, seven have been released without charge, Sheikh Saud said, without naming them.
Dozens of princes, senior officials and prominent businessmen, including cabinet ministers and billionaires, have been detained in the inquiry, which was announced last weekend and appears at least partly aimed at strengthening the power of Crown Prince Mohammed bin Salman.
The investigation has spread to the neighbouring United Arab Emirates, as the UAE central bank has asked commercial banks and finance companies there to provide details of the accounts of 19 Saudis, commercial bankers told Reuters on Thursday.
Almost all of the 19, including billionaire Prince Alwaleed bin Talal and former National Guard chief Prince Miteb bin Abdullah, are known to be have been detained.
The commercial bankers said UAE authorities had not explained why they wanted the information, but the bankers believe the authorities were acting at the behest of the Saudi government, which has said it aims to recover illicit funds.
UAE central bank officials were not available to comment, while Saudi officials, who have frozen over 1,700 domestic bank accounts as part of the crackdown, did not respond to requests for comment.
The UAE, particularly Dubai, is one of the main places where wealthy Saudis park their money abroad. In addition to bank accounts, they buy luxury apartments and villas in Dubai and invest in the emirate’s volatile stock market.
Some wealthy Saudi individuals have been liquidating assets within Saudi Arabia, the UAE and other Gulf countries this week, apparently in an effort to move money out of the region and escape the crackdown, private bankers and fund managers said.
In Riyadh, rich individual investors have been selling equities heavily, although buying by state-linked funds has helped to support the market. In Dubai, shares in real estate developers have sunk as investors worry about the impact on the property market of a pull-out by Saudis.
The UAE commercial bankers said they had not been asked to freeze the Saudi accounts at their institutions, but they believed the central bank’s request for information might be a prelude to such action.
The risk of the accounts being frozen “jeopardises Dubai’s pitch as a private banking centre”, said a Gulf-based banker, adding: “Banks in the UAE are full of Saudi money.”
One senior banker at an international bank with business in Saudi Arabia said his institution had already frozen some accounts, both inside the kingdom and outside it, in response to Saudi government requests.
The bank is conducting its own investigations into accounts linked to people who have been detained, the banker said without elaborating.
Another banker in the region said his institution was receiving more enquiries from Saudi clients about cross-border financial transactions, but it was handling the enquiries with extreme caution as there could be further action by regulators.
Saudi and foreign businessmen worry that the crackdown could hurt the economy if the freezing of bank accounts delays payments and companies become more cautious about investing.
On Thursday, Mojeb repeated statements by other top officials that normal commercial activity had not been affected and that only personal bank accounts had been frozen, not corporate accounts. “Companies and banks are free to continue with transactions as usual.”
The risk of fund outflows from the region has helped to push the currencies of Gulf Arab countries down slightly against the U.S. dollar in the forward market this week.
The Saudi riyal dropped in the one-year forward market on Thursday to imply riyal depreciation of 0.8 percent against the dollar in the next 12 months, compared to 0.3 percent before the crackdown.
However, it remains much stronger than it was last year, when the forward market implied depreciation of about 2.7 percent because of worries about Saudi Arabia’s ability to cope with an era of low oil prices.
Additional reporting by Saeed Azhar in Dubai and Lawrence White in London; Writing by Andrew Torchia; Editing by William Maclean and Peter Graff