Bloomberg has just issued a report entitled “Saudi Prince Who Wooed West Finds Few Friends in Tough Times” which is a report about how Prince Alwaleed, the billionaire investor who is the single largest shareholder in Citigroup, is now finding himself without friends, now that he’s been arrested on charges of corruption. The Bloomberg report can be read at:
What makes this report interesting is the fact that if the Saudi Royal Family has a hero in the Western world, it’s Prince Alwaleed. While the Prince did not get start with nothing, he is the only Saudi Prince who has been known to have made something of his stipend through his own brains and industry. He took the risk of investing in what was then known as Citicorp when its shares were at an all time low. The investment in Citicorp has grown more than ten times since the company merged with Travelers to become Citigroup and that’s not all. The Prince has also made successful investments in companies like Twitter and Lyft among others.
As well as being a successful investor, the Prince is also as close as the West has to someone who shares their values in Saudi Arabia. Women who work at Kingdom Holdings were known to have been allowed to go without a veil in the office and he most famously hired a female pilot in a country where women have only just been given the right to drive.
When you think of everything that Prince Alwaleed has achieved, you have to wonder why not many people have uttered a sound at his sudden imprisonment on 4 November 2017.
The simple reason is this; Prince Alwaleed got onto the wrong side of his cousin, the current Crown Prince, Mohammad Bin Salman, better know by his initials MBS. While Alwaleed may have been the darling of the Western media and the western business community, MBS had something far more valuable – controls of the levers of real power. While the rise of MBS has been sudden, nobody doubts that MBS will the first king from the grandchildren of Saudi Arabia’s founding father, King Abdul Aziz Bin Abdul Rahmad Al Saud.
Simply put – power trumps money. While having money often brings one great power (for example nobody screws with Li-Ka-Shing in Hong Kong), the two are in actual fact separate items. I should know, I’m from an ethnic group living in a part of the world where people of my ethnic group have money but live fear from the people with power. The people with the power can always get hold of the power while the people with the money don’t always have the power. I live in Singapore where one doesn’t mess with the family of Lee Kuan Yew because this is the family with the power. By contrast, I can afford to be less polite about Wee Chow Yaw, the former head of UOB Bank. The reason is simple, the late Mr. Lee and his family have influence on the government and thus over just about everything in Singapore that I need for my basic survival. While Mr. Wee has power due to his vast wealth, he doesn’t affect my life if I don’t work for him.
Furthermore, friendships in business tend to be dominated by self-interest. When you need someone, you tend to be nice to them and helping them out often depends on self-interest. When someone with greater influence comes along, you tend to find that the people whom you thought were your friends, start jumping ship.
I think of Susan Lim case, which I helped out on. Dr. Lim was a star surgeon to the rich and famous. She’s married to Deepak Sharma, the former Chairman of Citi’s Private Bank. Between them, they had more money than most could dream about and the rich and powerful clamoured to be their friends. Then, it all broke down. The powerful no longer came knocking at their door. The reason was simple. The Singapore Government was given a choice between her and Mr. Sharma and the Sultan of Brunei. The government chose the Sultan of Brunei.
Likewise, for Prince Alwaleed. The boardrooms of the West would salivate at the thought of an investment from Prince Alwaleed. But when given a choice between Alwaleed who had money and some princely influence and MBS who has the power of the entire Saudi Government and its influence in the Muslim world (Saudi Arabia is Custodian of the Holy Mosque of Islam), the cold-hard-power calculations point towards not risking the prospect of offending MBS.
What are the lessons to be learnt? I guess the key is to recognize where the power lies and understand what your friends will or will not do for you. There is such a thing as not asking your friends to stick out their necks for you so that they do remain your friends.
Then there’s the importance of cementing your relationships to something stronger than money. If a relationship is based merely on money, you’ll find the party running when a better offer is made. It’s especially common when you see Westerners finding love with much younger Asian girls. The Westerner really believes that the girl loves him for him. Suddenly, when a better offer appears she dumps him and he’s heart broken. I’m not casting aspersions on West-East relationships but it’s a common site in this part of the world where you see normally intelligent Westerners losing themselves to girls who are obviously in the business.
Prince Alwaleed has found this out the hard way. He has lots of money and now he’s found his friends in the West have found someone who has something more desirable.
You need money to get things moving. You need friends to do things. Its often said that the two go hand in hand. However, if money is all there is to a friendship, you may find yourself losing a friendship when the money is not longer there. It’s a basic fact that many of us forget until it is too late.