Kingdom Holding, one of Saudi Arabia’s highest-profile investors, poured hundreds of millions of dollars into Russian energy firms shortly before and after the invasion of Ukraine this year, the group disclosed in a filing on Sunday.
Majority owned by Prince Alwaleed bin Talal, Kingdom made the investments even as western leaders sought to increase pressure on Moscow and threatened sanctions against Russia, which they began imposing in late February.
The roughly $500mn investments included $364mn in Gazprom in February, with the rest going into Rosneft and Lukoil that month and in March. President Vladimir Putin ordered the Russian invasion of Ukraine on February 24.
Prince Alwaleed, a Saudi billionaire, was detained in 2017 at the Ritz-Carlton Hotel in Riyadh with other tycoons and royals in what the authorities called a corruption sweep.
Critics said it was a powerplay by the ascendant Crown Prince Mohammed bin Salman to consolidate his position against an influential old guard. The state said it retrieved $100bn in ill-begotten funds.
Prince Alwaleed, whose grandfather founded Saudi Arabia, was freed after reaching an agreement with the government, although he has never disclosed the details. Other tycoons were released after transferring funds or partially ceding control of their companies to the government.
The government’s sovereign wealth fund, the Public Investment Fund, said it acquired a 16.8 per cent stake in Kingdom Holding in May, months after the investments. But it would be unlikely for a large Saudi company to conduct big investments in Russia without the government’s blessing given the western pressure on Moscow.
Other investments disclosed on Sunday include a $220mn investment in Phoenix Group, a UK pensions and savings company, and $221mn in the investment manager M&G. It also made investments in Uber, Lyft, Alibaba and BlackRock TCP Capital. Kingdom Holding said these were part of a three-year-long investment strategy totalling $3.4bn. The company has investments in the Four Season hotel chain and also owns a stake in Twitter.
Saudi Arabia has fostered close ties with Russia, with both countries co-operating in Opec+ on oil production. Its ties to Washington have been strained since President Joe Biden came to office, after vowing during his campaign to turn Saudi Arabia into a pariah over the murder of journalist Jamal Khashoggi by Saudi agents. The CIA said Prince Mohammed was responsible for the operation to “capture or kill” Khashoggi, something the prince has denied.
Biden has since had to backtrack on his pledge and he visited the country in July, meeting with Prince Mohammed as he pushed for more oil production to offset prices and inflation.