Saudi investors 'could withdraw US funds'

bbc ^ | 8/19/02

[Ranger]

Monday, 19 August, 2002, 11:36 GMT 12:36 UK

Saudi investors 'could withdraw US funds'
 

Saudis deny they have funded terrorists
 

Saudi investors have threatened to withdraw some of the $750bn (£487bn; 766bn euros) they have invested in the US after families of 11 September victims filed a lawsuit against Saudi banks and charities for damages.

 

Assuming the court proceeds with this lawsuit, the Saudi investment community, already in shock, will start withdrawing their money

 

Bishr Bakheet
Bakheet Financial Consultancy

"This is an act to extort Saudi money deposited in the US and a way of meddling in the region," an official at Al-Rajhi Investment and Development Corp, one of the Saudi banks named in the lawsuit, told the Reuters news agency.

Relatives of about 900 people killed in the attacks filed a civil suit in a Washington court last Thursday seeking damages of over $1 trillion.

It accused three senior Saudi princes - including Defence Minister Prince Sultan, the kingdom's third highest official - several Saudi and other foreign banks, and Sudan's government of funding Osama bin Laden.

Pull-out threat

"Naming Prince Sultan is the equivalent of saying J. Edgar Hoover was a communist spy," said economist Bishr Bakheet of the Bakheet Financial Consultancy.

"Assuming the court proceeds with this lawsuit, the Saudi investment community, already in shock, will start withdrawing their money. People are really going to walk out," he said.

Dr Abd-al-Rahman al-Zamil, chairman of Al-Zamil Group, has urged Saudi investors to repatriate their funds to the kingdom, Saudi newspaper Arab News reported.

Riyadh has yet to officially comment on the lawsuit.

A Sudanese government minister also dismissed allegations that Khartoum had funded Osama bin Laden, the Saudi-born dissident Washington says masterminded the 11 September attacks.

Zero error

The lawsuit originally sought $100 trillion in damages but the lawyer for the victims late on Friday amend the suit to $1 trillion.

"I don't know how $100 trillion got in there. Somebody probably typed it at four o'clock in the morning," lawyer Ron Motley told the AP.

Mr Motley said the $1 trillion plus damages claim was calculated by multiplying the number of plaintiffs by the average award of $30m in such cases and then again by three.

He cited a federal law which says that damages can be tripled for victims of terrorist crimes.

Saudi-US strains

Fifteen of the 19 September 11 hijackers have been identified as Saudi, but the country's government has repeatedly stressed they were not involved in the attacks.

The lawsuit alleges Saudi money has "for years been funnelled to encourage radical anti-Americanism as well as to fund the al Qaeda terrorists".

Riyadh's refusal to allow the US to use its territory to attack Iraq and repeated criticism of pro-Israel US bias have strained relations between the oil superpower and Washington.

[Ranger]

Knew this threat was coming. Also FYI Saudi is running large accounts deficit right now, so some repatriation is also going to occur because of that. On the other hand I doubt Saudi princes are parking their money in the magic kingdom. More likely they are sending to Europe.

[Sen Jack S. Fogbound]

Yeah, the possibility is there. They can do real damage to the finacial well-beings in the country by such massive pull-out.

[babygene]

"Does this mean another $1 trillion in stock market losses as the Saudi's dump stocks?"

No, because the victims who get the money have to invest it somewhere...

[Guillermo]

I read a coupla months ago that Arab money was already flowing out of the US...

[babygene]

Our government should freeze their funds until the case is settled

[singletrack]

But what will they do with it then? Invest in Euros? Asian markets? The damage they do by pulling out of the modern world is less than the damage from allowing them to stay in the 21 century.

[laconic]

Let them take their money and go home with it (perhaps it will do a world of good for the people of Saudi Arabia instead of the kleptocracy that runs that country for the benefit of a very, very few). Sometimes you have to stand on principle, the consequences be damned.

[NerdDad]

Let the Saudis dump their stock and pull their money, maybe they can take it back to SA and invest it in camel droppings and sand piles.
The threat is empty. They can't get out of a down market because it would cost them too much. They don't want it in their own country because having it there would encourage their minions to revolt and the royals would lose it all. They can't pull it out of the US and put it anywhere else because there is nothing with that kind of value into which they can invest. They are smarting already because the price of oil is down. This is meaningless sabre rattling. They will count on the billions they have invested in US judges to start paying dividends if this suit ever actually gets started.

[leadhead]

Right on!

They pull out fast, it gives us Joe Schmoes a buying opportunity for some of their good investments.

It will also sink some of their unwise investments (that I never considered investing in) like AOL, Citicorp, etc.

Fools and their money are some party, as my Daddy always said.

[Real Cynic No More]

Well, if the U.S. is freezing the assets of terrorists, the answer is fairly simple.

[Paul Ross]

This kind of stupid threat to flee with their assets is also the solid basis for a motion by the plaintiff's attorneys for a pre-lien attachment.

All I can say is, Go Get 'Em Plaintiff's Bar!!!!

[GovernmentShrinker]

I wouldn't stress about it. Where the heck else are they going to invest that kind of money and get any sort of decent return? At worst, they'll yank their money from direct investments in the U.S., and then quietly reinvest it via offshore shell companies and hedge funds, and via Asian and European multinational companies who will in turn invest in the U.S. Their idiot sheeple will be impressed, and the spoiled brat princes will continue to rake in huge returns to fund their decadent globe-trotting playboy lifestyles.

[RightWhale]

They better withdraw their investments right away before they are frozen.

[Billy_bob_bob]

It would seem pretty obvious that their assets will be frozen if another serious terror attack happens anytime soon, and it has anything to do with Islam or Saudi nationals.

[aristeides]

Money invested in U.S. judges by the Saudis? I wonder if that judge down in Marco Island, Florida was one such judge.

[Osinski]

This is BIG money. Here comes more smokescreen as the elitists running this stock market con game try to pin the next big downturn on the Saudis. Trying to rouse the public into a war, while covering their sorry behinds.

[backhoe]

Just for perspective:

CIA -- The World Factbook -- Saudi Arabia

GDP: purchasing power parity - $232 billion (2000 est.)

CIA -- The World Factbook -- United States

GDP: purchasing power parity - $9.963 trillion (2000 est.)

[sinkspur]

This is BIG money. Here comes more smokescreen as the elitists running this stock market con game try to pin the next big downturn on the Saudis. Trying to rouse the public into a war, while covering their sorry behinds.

And you're a sucker because you actually believe that the Saudis are going to do this.

[Dog Gone]

This ain't gonna happen.