Art gifts

Saudi royal family sells homes, yachts and artwork as crown prince cuts income

The deals represent a sea change in fortunes for the senior princes who funneled windfalls from the oil booms of the 1970s and 1980s into some of the world’s most exclusive markets. The huge sums of money have been spent largely on hard-to-sell assets or drained by expenses that have reached $30 million a month for some royals with large staff and lavish lifestyles, making them vulnerable to recent changes in government policy.

Now some royals are selling overseas assets to generate cash after Crown Prince Mohammed bin Salman, the 36-year-old de facto ruler of the kingdom, dried up many sources of cash they had used to maintain their extraordinary spending habits, said people close to the princes making the sales.

The princes need the money to pay day-to-day bills, including property maintenance, taxes, staff salaries and parking fees for their planes and boats, the people said. In some cases, people said they are also motivated by a desire to hold less ostentatious assets to avoid attracting the attention of Prince Mohammed, who has restricted their privileges and access to public funds in the family. Al Saud since his father ascended the throne. in 2015. The Saudi government is aware of the sales.

“These people don’t work, they have huge teams and they are afraid of [Prince Mohammed]“, said a person familiar with the transactions. The princes, added the person, want “money in their back pocket and not to have visible wealth”.

Among the assets recently sold are a $155 million British estate, two yachts over 200 feet long and Mughal jewelry given as a wedding gift by a deceased king. The vendors, including former ambassador to Washington Prince Bandar bin Sultan, were once among the most powerful people in Saudi Arabia.

“They have clearly been reduced to a disciplined and defined regime and have to live with that,” said British historian Robert Lacey, who has chronicled the Saudi ruling family since the 1980s. Prince Mohammed is “here to the long term and it reshapes things for the long term.”

A representative for Prince Bandar said he sold all his overseas assets “because he sees greater benefits in investing in the kingdom through the incredible work the Crown Prince is doing and creating all the opportunities for ‘investment”.

Prince Mohammed sidelined relatives seen as potential rivals – including an older uncle and cousin detained in 2020 – and cut benefits for thousands of senior royals, including paid vacations abroad or electricity and water bills in their Saudi palaces. These benefits amounted to hundreds of millions of dollars in annual costs to the Saudi government.

Top members of the royal family have racked up billions of dollars a year from oil and real estate sales as well as business deals involving the government, from which Prince Mohammed has gradually cut them. The government is pressing royals in other ways, this year launching a tax of $2,500 for every domestic worker beyond the fourth employee, costing some royals hundreds of thousands dollars per year.

US diplomatic cables from the 1990s released by WikiLeaks show that some members of the royal family were generating wealth by taking loans from local banks without repaying them, expropriating land from commoners or exploiting the foreign work visa system. for profit. People familiar with royal finances say princes continued to benefit from such schemes until Prince Mohammed came to power. A stipend system for thousands of Saudi princes, which US cables say costs the government billions of dollars a year, remains intact according to one of those people.

Many princes have adjusted their lifestyles due to changes in the global economy and changes inside Saudi Arabia that have “turned off the taps”, according to this person.

“They had a standard of living that was beyond expectation,” said another person familiar with the transactions. “The expenses are out of this world. They need time to adjust.”

Saudi Arabia’s media ministry did not respond to questions about the royals’ finances.

Some of the Saudis currently liquidating assets were temporarily detained at Riyadh’s Ritz-Carlton hotel in 2017 in what critics called a shakedown and power play by the Crown Prince, who described it as an anti-corruption measure . Many were released only in exchange for financial settlements. Arrests of prominent figures have continued, according to the anti-corruption commission.

The Ritz inmates included the late Prince Turki bin Nasser. The former air force commander was among Saudi officials investigated by the UK Ministry of Defense on suspicion of receiving sweeteners from BAE Systems PLC in return for lucrative contracts to supply fighter jets and aircraft. other military equipment to the kingdom, in what became known as the Al Yamamah Arms Sale in the 1980s.

Most members of the Saudi royal family no longer have access to such deals under Prince Mohammed. Representatives of Prince Turki’s estate could not be reached and a surviving brother did not answer questions about the British investigation, which the prince has never addressed publicly.

Prince Turki sold his 203ft yacht in 2020 and a $28.5million home in Los Angeles’ exclusive Beverley Park community in 2021, according to people familiar with the deals. He died before the sale of the house was completed; his family could not be reached for comment. The terms of his settlement following his detention at the Ritz could not be known. His net worth was previously estimated at more than $3 billion, according to a Saudi official.

Others selling their belongings have never been detained. For example, in 2021 Prince Bandar sold a $155 million country estate in the Cotswolds west of London, according to people close to him familiar with the deal. He was once close to the center of Saudi power and two of his children now hold important posts as ambassadors to Washington and London. The British government in 2007 ended its investigation into allegations that he had enriched himself through the Al Yamamah deal without making any findings. Prince Bandar strongly denied that the sums involved represented secret commissions for him.

Prince Bandar is the son of the late Prince Sultan bin Abdulaziz, one of the main branches of the royal family whose sources of income dried up under Prince Mohammed. Prince Turki was Prince Sultan’s son-in-law.

Prince Sultan’s wealth stems largely from his access to government funds, personnel and resources for nearly half a century as defense minister, say people familiar with his estate. Bank records reviewed by The Wall Street Journal show that in just one year he transferred tens of millions of dollars from government accounts at Saudi American Bank directly to proxy accounts in Switzerland to help fund his style of life. “It stopped 100%,” said a person familiar with the activities.

Feeling pinched by Prince Mohammed’s movements, Prince Sultan’s heirs have unloaded a mansion in London’s Knightsbridge district that sold for a record $290million in 2020, according to people close to the royal family. and familiar with the transaction.

One of Prince Sultan’s sons, Prince Khalid bin Sultan, who commanded troops alongside General Norman Schwarzkopf during the first Gulf War in 1991, has sold a Paris mansion next to the Eiffel Tower for more than 87 million dollars in 2020 and a 220ft superyacht in 2019, according to people close to him and familiar with the deals.

Some of Prince Sultan’s children are also trying to mortgage their global assets to raise money to make up for the shortfall in traditional sources of income, people familiar with the efforts said. One of them, Prince Fahd bin Sultan, was sued by Credit Suisse in November for allegedly defaulting on loans he took out to refinance a $55m superyacht and a $48m estate. million in south London, according to court documents.

Princes Khalid and Fahd, contacted through a representative, declined to comment.

Gary Hersham, founder of luxury real estate specialists Beauchamp Estates, who has been involved in several Sultan family transactions, said that in general the younger generation of Saudi royals no longer need or don’t are more using the large domains that their predecessors bought. They are big spenders and prefer to have cash, he said.

“They want less ostentation, that’s the trend,” he said, noting a few smaller home purchases recently.

This story was published from a news agency feed with no text edits

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.