Saudi Government Takes Control of Binladin Group Construction Giant

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byJohn Hayward11 Jan 20180

11 Jan, 201811 Jan, 2018

The Saudi government has assumed managerial control of the enormous Saudi Binladin Group, the largest construction company in the nation, and may nationalize some of the group’s assets, according to Reuters.

The move is part of an anti-corruption crackdown that some view as an effort to grab money and resources for a once-profligate government in deep financial trouble, and a consolidation of power by the recently-named heir to the throne, Crown Prince Mohammed bin Salman.

Many of the Binladin Group’s senior officers have been detained as part of the anti-corruption crackdown, and are in the process of working out large cash settlements with the government to secure their freedom.

It is a family business to a large extent, and yes, it is that family: the relatives of the late al-Qaeda mastermind Osama bin Laden, who once owned shares in the company but was disowned by his family in 1993. The family argued in court that bin Laden never had any real connection to the construction company and his assets were frozen by the Saudi government years before the U.S. government first took financial action against him.

Under the new management plan, only two bin Laden family members have seats on the five-member controlling committee.

The corporation has bigger problems than the name of the controlling family. The oil glut meant less government money for big construction projects, and it was banned from government work outright after a horrendous accident involving a construction crane at the Grand Mosque of Mecca in 2015. A subsequent investigation found the crane was not properly secured, although a Saudi court ruled the company was not responsible for the disaster, blaming unpredictable severe weather instead.

Angry protests and acts of vandalism were carried out by some of the 50,000 workers laid off over the past few years, many of whom were foreign-born, so they were kicked out of Saudi Arabia to boot. The protesters said the Binladin Group owed them hundreds of millions of dollars in back wages.

The Binladin Group’s debt load has been estimated at around $30 billion, a good deal of which is due to bills the government held off on paying after oil prices dropped. The exact situation of the company is not widely known because it does not issue public financial statements. The group has also been sued by families of 9/11 victims on the grounds that Osama bin Laden used his family inheritance to bankroll the formation of al-Qaeda.

Even in its diminished state, with thousands of jobs lost since the Mecca accident, the Binladin Group is still the largest builder in Saudi Arabia and a vital component of the monarchy’s plans to modernize the country and move away from dependence on oil wealth.

Original Article