Shock and law: Corruption crackdown not a power grab, says Saudi crown prince

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Saudi Arabia's crown prince Mohammed bin Salman denied that the recent crackdown on corruption in the kingdom was an attempt at a 'power grab' during his interview with United States news network CBS.

In an interview which aired on the network's 60 Minutes show, Bin Salman said accusations that the crackdown was an attempt to secure power were "naive".

"If I have the power and the king has the power to take action against influential people, then you are already fundamentally strong," he said during the interview.

More than $100 billion in funds was recovered as a result of the crackdown, the crown prince said, but he argued that the objective was not to secure "this amount or any other amount".

"The idea is not to get money, but to punish the corrupt and send a clear signal that whoever engages in corrupt deals will face the law," he said.

One of the prince's advisors, Mohammed Al Sheikh, also told the programme that the kingdom had been losing "probably 5 to 10 percent" of the government's annual spending, which he estimated at $10-$20 billion, as a result of corruption.

In a briefing with journalists in Dubai last week, Moody's senior analyst Alexander Perjessy said that the corruption crackdown which began in November last year and largely wound down last month "has either a small positive or neutral impact" on the kingdom's sovereign credit profile.

"In principle, being able to recover some of the assets and transfer them to the sovereign would be credit positive overall," Perjessy said, arguing that the amount of money that has reportedly been secured equates to around 15 percent of Saudi Arabia's GDP.

"However, it is not clear what's exactly the composition of this... how liquid they (the assets secured) are, how easily they can be used. There is quite a bit of uncertainty as to what extent there will be a positive impact on the balance sheet," he added.

"On the other hand, the opaque manner in which the anti-corruption drive was conducted raises some concerns about the risks of doing business in Saudi Arabia that may dampen some of the business confidence and the investor confidence in Saudi Arabia that will be critical to the economic diversification plans," Perjessy said.

On Thursday last week, Reuters reported that the Saudi government is expected to take a 35 percent stake in contracting company Saudi Binladin Group as part of its settlement deal.