King empire

Saudi King Salman, his sons and Airbus

Last month, a London court understood how a senior executive and associate at an Airbus subsidiary paid more than $11.5m (£9.7m) in bribes to Saudi military officials to secure lucrative contracts for the British government.

The case, which was first revealed by Private Eye in 2016, relates to a UK government deal to provide communications services to the Saudi Arabian National Guard (SANG), which were provided by a unit today defunct Airbus called GPT Special Project Management. The Serious Fraud Office pursued the case. He claims that GPT paid other companies, which were then used to bribe senior Saudi officials, including Prince Miteb bin Abdullah bin Abdulaziz, former head of SANG, to secure the contracts.

Opening the defense case at Southwark Crown Court, barrister Ian Winter QC described the structure of the government-to-government agreement, which dates back to the late 1970s, as a ‘fidget’ which allowed members to the Saudi royal family and the British government “to deny having knowledge of [the payments] at all.” Winter went on to say, “This indictment does not begin to plumb the depths of what the British government has been embroiled in since the late 1970s.” The case not only promises to shed new shed light on the depths of the UK-Saudi relationship, but also to overshadow a much more recent Saudi deal with Airbus struck by Crown Prince Mohammed bin Salman (MBS) for the exclusive benefit of himself and his family line.

MBS’ murky business empire

Little public information is available on how Clan Salman manages their business empire. It is believed that MBS supervises him personally and his own brother Turki and mother Fahda bint Falah bin Sultan al-Hithlayn are also involved. Fahda, who is never seen in public, was reinstated in Saudi society without comment in 2018 after being Locked by MBS for two years. Turki’s primary role is to introduce Western businesses to the Crown Prince and he deliberately stays away.

Outside of Saudi Arabia, the family controls three companies registered in Luxembourg—Safason Corporation, Valburtohn Investments SA and Folabin— on which very little public information is available. In Saudi Arabia, their main commercial vehicle is Tharawat Holding Company of which Turki bin Salman is the chairman.

Tharawat Holding Company has business interests in Saudi Arabia in various sectors, including construction, real estate, health, education, sports development, food and beverage, aquaculture, telecommunications and management of natural resources. He is also suspected of having made his fortune with defense contracts linked to the war in Yemen. Before being kidnapped and returned to Saudi Arabia against his will, a dissident Saudi prince said Arabic abstract that when the war broke out, Tharawat diversified its foreign partnerships in military hardware and that the Salman clan became immensely enriched via inflated arms deals arranged by Turki.

“[Salman’s branch] are behind things inside the country and the Saudi public knows that,” the prince said. “MBS operates his business by bringing in his special people and he controls the Royal Court. The younger brothers earn money, especially Prince Turki bin Salman. He has no official position – just a businessman – but MBS has offers for his brother. Turki works for them.

In September 2015, an anonymous grandson of Ibn Saud published a letter calling for the downfall of the Saudi king in which he warned that large sums of money were being embezzled by the inner circle of the royal family. The letter said $160 billion (SAR 600 billion) had been taken by the leaders and another $100 billion (SAR 375 billion) would have gone directly to MBS and his brothers, Turki, Khaled, Nayif, Bandar and Rakan.

Power and wealth of MBS, his sons and brothers

The dissident prince also said that Turki told him that MBS intended to change the current system of succession in the Saudi kingdom to one based on primogeniture so that MBS’ own son would inherit the throne after him. “Turki told me that we will be like Bahrain and Jordan where MBS will be king and then his son will be his successor,” the prince said.

“When MBS becomes king, he wants to put one of his children as crown prince, he wants him in his family, Salman’s family, so he will appoint his son as crown prince although he is just a little baby. He has a son called Salman. MBS wants to put him on the crown in the same way as the monarchies of Morocco, Bahrain, Jordan or England do, to keep the throne for his blood. Either MBS will place his son directly as crown prince, or he will name one of his brothers first, then his son.

A business deal the Salman clan is known to have been involved in is arranging financing for a new fleet of Airbus aircraft for Saudi Arabian Airlines, Saudi Arabia’s flagship carrier. In 2018 The Wall Street Journal published a investigation how the clan uses government-linked businesses to make a fortune. The story details how when MBS came to power, he helped rethink the original plan.

According to the original plan, Saudi Arabia’s Public Investment Fund (PIF) would have purchased 50 new aircraft directly from Airbus for Saudi Arabian Airlines. MBS ditched that deal for a much more complex deal involving a newly created company called International Airfinance Corp (IAFC), which runs an Islamic finance fund called ALIF and is partly owned by an Islamic bank based in Dubai’s international financial center called Quantum Investment Bank in which Tharawat has acquired a 54% stake. Turki, the brother of MBS, is the president of this bank.

Despite concerns about the deal – Saudi Arabian Airlines did not solicit bids from any other company – and the fact that the Serious Fraud Office in London was already investigating an Airbus subsidiary at the time for corruption involving of the Saudis, Airbus agreed to invest $100 million. in ALIF on the condition that the fund only buys Airbus aircraft. On June 23, 2014, Airbus and IAFC held a “signing ceremony” in London to announce the new fund. IAFC Press release tells us that Turki hosted this ceremony.

In 2015, after the death of King Abdullah, the plan again turned into an even more complicated chain of transactions. Instead of being sold directly to the Saudi government, the planes would now be sold to ALIF, which would in turn lease them to state-owned Saudi Arabian Airlines, which was later rebranded Saudi Arabia. Note that this convoluted deal helps Tharawat become a beneficiary. As a government official Put the“in the end, he went to Tharawat, who got others to fund him, and made huge profits without risking their money.”

On August 5, 2015, the anonymous Saudi opposition Twitter account Mujtahidd tweeted that the list price of 30 Airbus A320s and 20 A330-300s was $8 billion (SAR 30 billion), but the budgeted amount was $12 billion (SAR 45 billion). The budgeted price is 50% above the listed price, which means that $4 billion could go into the pockets of MBS, Turki and their brothers. The original tweet is no longer available as Mujtahidd was hacked a month later and all his tweets were deleted. Mujtahidd also wrote that MBS financed the deal with a guarantee from the Saudi government, on the condition that Saudi Arabian Airlines pay Tharawat 150% of the agreed price.

The deal was finalized by MBS during a visit to France in 2015 and soon after, at a rally at a Saudi palace, he took credit for it. MBS said the transaction demonstrated his success in balancing the financial interests of the Saudi state with the interests of his family. MBS would have said, “I’m the mastermind behind this deal.” Depending on what happens next with the Serious Fraud Office case currently unfolding at Southwark Crown Court, MBS’ cherished deal could yet unblock.

[Arab Digest first published this article and is a partner of Fair Observer.]

The opinions expressed in this article are those of the author and do not necessarily reflect the editorial policy of Fair Observer.