Forbes: Saudi billionaire puffs up wealth

Forbes alleges Saudi Arabia's Prince Awaleed bin Talal exaggerates his wealth, publishes investigation into his net worth

Story highlights

  • Forbes billionaires list claims Prince Alwaleed bin Talal "exaggerates" wealth
  • Magazine estimates prince's worth at $20bn - $9.6bn below prince's own estimate
  • Forbes: Prince's Kingdom Holding 'rises, falls on factors tied to Forbes list'
  • Alwaleed: Forbes claims biased that stock manipulation is 'Saudi national sport'
The Forbes billionaires list, seemingly designed to stroke the egos of the world's richest people, has pricked one of them in painful fashion, alleging that Prince Alwaleed bin Talal "systematically exaggerates" his wealth.
Hours after the Saudi investor announced that he was "severing ties" with the benchmark of billionaires' bragging rights, the magazine published a lengthy investigation into his net worth.
Forbes' estimate, up $2bn in the last year to $20bn, stands $9.6bn below the prince's own estimate. Almost all of the gap, it said, stems from a starkly lower assessment of his 95 per cent stake in Kingdom Holding, which houses his investments in assets including Four Seasons hotels, Citigroup and News Corp.
Noting steep jumps in the stock before publication of the last four Forbes lists, the magazine said Kingdom's valuation "rises and falls based on factors that, coincidentally, seem more tied to the Forbes billionaires list than fundamentals". The magazine added that no other billionaire lobbies as hard as the prince does to affect his or her ranking.
Prince Alwaleed's office reacted angrily to the "completely unsupported and biased allegation based on rumours that stock manipulation 'is the national sport' in Saudi Arabia", describing it on Tuesday night as an insult to Saudi regulators.
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Retail investors dominate the Saudi stock market -- the biggest exchange in the Arab world -- and investors say local rumours often drive share price movements rather than company fundamentals or public announcements.
Yet of all the Gulf stock market regulators, Saudi Arabia's Capital Market Authority is seen as the most powerful. "The market is regarded as one of the strictest regulated in the Gulf, they have cracked down in the past," says one Riyadh-based analyst.
The questions surrounding Kingdom come as the country edges forward with plans to open the stock market to foreigners. Currently, international investors can only buy Saudi stocks through equity swaps.
Scrutiny of Kingdom could be the first test for the new head of the CMA, Mohammed bin Abdulmalik Al-Sheikh, a former lawyer who was appointed president of the regulator last month.
PwC, which replaced Ernst & Young as auditor to Kingdom after the 2010 audit, had no comment. Kingdom said it had had no disputes with Ernst & Young and noted that Saudi Arabia requires public companies to change auditor every three years.
Bloomberg, which launched a competing billionaires ranking last year, puts the prince's net worth at $28bn. But it also applied a "confidence rating" of three stars out of five to its valuation -- as it often does in countries "where transparent information is often unreliable".
Additional reporting by Adam Jones in London