Two former French presidents have expressed concern to Saudi Arabia’s crown prince that the arrest and detention of billionaire Prince Alwaleed bin Talal has raised worries among foreign investors, according to French and Saudi government advisers. The messages from François Hollande and Nicolas Sarkozy, France’s two most recent previous presidents, highlight the business uncertainty caused by the arrest of hundreds of people in early November in what Saudi authorities said was an anti-corruption campaign.
Crown Prince Mohammed bin Salman listened to both ex-presidents’ views on Prince al-Waleed and told them that French-Saudi ties are important, the advisers said.
The Saudi government has demanded that Prince Alwaleed, Saudi Arabia’s richest businessman, pay more than $6 billion to settle accusations of money laundering, bribery and extortion—allegations the prince is fighting, according to people close to him.
Some of the detained have been released after paying hefty settlements. The ex-presidents didn’t ask the crown prince for Prince Alwaleed to be released, the advisers said but added their own voices to those of many others who are concerned that the Prince has, to all intents and purposes, “disappeared” from public life.
Prince Alwaleed, whose fortune is estimated by Forbes to be over $16 billion, is a large investor in France in addition to his other massive international business portfolio. The 63-year-old prince holds large stakes in the Paris-based Eurodisney, French hotels, banks and businesses and he helped broker a deal last year with France’s sovereign-wealth fund to bring $400 million in investment to Saudi Arabia.
A person close to Mr. Hollande confirmed he phoned Prince Mohammed but declined to comment further. A person close to Mr. Sarkozy said he has “regular conversations” with Prince Mohammed and declined to comment further.
The appeals from Messrs. Hollande and Sarkozy came after French executives involved in partnerships with Prince Alwaleed complained about his arrest to the office of President Emmanuel Macron, the advisers said.
Mr. Macron, who succeeded Mr. Hollande as president in May, has not commented publicly on the Prince detention. “We have the same relationship with Alwaleed as any investor of this magnitude,” said an aide to Mr. Macron, declining to comment further on what he called “Saudi domestic affairs.”
Mr. Hollande told the Saudi crown prince in December that French businesses were concerned the detention could affect their plans in Saudi Arabia, the advisers said. Mr. Sarkozy, whose five-year term ended in 2012, delivered a similar message in November, the advisers noted.
Saudi officials, responding to questions about international business concerns, described the anti-corruption campaign as a sign of commitment to international best practices in business. “We believe that combating corruption is key to a healthy domestic investment environment to continue enticing” foreign investment, the Saudi Embassy in Washington said. Foreign investment remains at high levels following the corruption crackdown, “as does interest in Saudi Arabia as a high growth market substantiated by the number of requests for investment licenses and business visas,” the embassy said.
However, all the indications are to the contrary. The so called anti-corruption purge has called the integrity of the Saudi regime into question. International corporations, speculators and private business people are all asking the same questions: How is it possible that a country currently courting business with the rest of the world, civilians are simply lifted from the street, imprisoned and held to ransom, with the price on their head seemingly based purely on the extent of their wealth? How could a figure such as Alwaleed, who for decades has stood squarely behind progress and reform in his homeland, find himself a prisoner of the very regime he has so staunchly supported?
Despite the reassuring words of the Saudi embassy in Washington, all the evidence points to the fact that international investors are showing a marked reluctance to invest in the kingdom following the widespread November arrests, a situation unlikely to change any time soon unless and until there is is a dramatic change in official policy.
Prince Alwaleed is believed to be being held at the Ritz-Carlton hotel in Riyadh and hasn’t spoken publicly since his detention began in early November.
Saudi officials declined to provide information about Prince al-Waleed, citing national privacy laws. They say the corruption crackdown is necessary to change a system where businessmen, government officials and the royal family enriched themselves through means that would be considered bribery in other countries.
The corruption arrests came amid Saudi Arabia’s attemp to open up to the world on multiple fronts. Prince Mohammed plans this year to lift the world’s only ban on women driving, to allow cinemas to open for the first time in decades and to publicly list the country’s giant state oil firm, Saudi Arabian Oil Co.
In France, Prince Alwaleed is connected to a host of businesses. The prince holds a 5.8% stake in AccorSA, the French hotel chain. The Prince’s conglomerate, Kingdom Holding Co., last year bought half of French bank Credit Agricole and a stake in Banque Saudi Fransi for $1.54 billion. Nasair, the Saudi budget airline, which is 34% owned by Kingdom Holding, has signed an $8 billion deal with French aviation giant Airbus for the purchase of new aircraft.
Mr. Hollande presided over the French sovereign-wealth fund’s $150 million investment in Kingdom Holding and was president when $12 billion in deals between French businesses and the prince were signed. Mr. Sarkozy is the chairman of Accor’s international strategy committee.
Prince Alwaleed met with President Macron in September to discuss expanding French-Saudi ties, which include a $400 million investment fund led by the French sovereign-wealth fund to direct investments to Saudi businesses from large French businesses including insurance giant AXA and telecommunications firm Orange.
Meanwhile, multiple French businesses have expressed concern that the Saudi demands could force Prince Alwaleed to relinquish control of investments, according to Saudi government advisers and French executives and consultants.
“People are hesitating. Some deals are on hold because of uncertainty over who to partner with,” said Denis Florin, head of Paris-based Lavoisier Conseil, an adviser to companies seeking business in Saudi Arabia.
This edited article with acknowledgement to the Wall Street Journal