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Saudi threat to withdraw billions in US investments

By Simon English in New York (Filed: 20/08/2002)

Saudi Arabia's richest investors are threatening to pull billions of dollars out of America in anger at suggestions that they helped fund Osama bin Laden.

Osama bin Laden A lawsuit filed by relatives of 900 people who were killed in the September 11 attacks is provoking fury among wealthy Saudis. The suit filed in a Washington court last week seeking damages of $100,000 billion names three members of the Saudi royal family, including defence minister Prince Sultan bin abd al-Aziz al Saud.

The lawsuit alleges that Saudi money has "for years been funnelled to encourage radical anti-Americanism as well as to fund the al-Qa'eda terrorists". Banks and charities named in the suit are calling on Saudi Arabia to review its financial and political ties to the US.

Bishr Bakheet of the Bakheet Financial Consultancy said: "Naming Prince Sultan is the equivalent of saying J Edgar Hoover was a communist spy. Assuming the court proceeds with this lawsuit, the Saudi investment community, already in shock, will start withdrawing their money. People are really going to walk out."

This threat comes as foreign investment in the US dries up because of business scandals, lower corporate earnings and the collapse of the technology boom. According to government figures, foreigners put $124 billion into the US last year, down from $301 billion in 2000.

Economists say the reluctance of wealthy outsiders to expand their business interests in America is a major threat to the world's largest economy. Saudi investors have $750 billion in the US. A mass walkout would seriously impede the US's attempts to pull away from recession.

A spokesman for the Al Rajhi Investment and Development Corporation, a bank named in the lawsuit, said: "This is an act to extort Saudi money deposited in the United States and a way of meddling in the region."

Fifteen of the 19 hijackers involved in the September assaults have been identified as Saudi, though the government has repeatedly denied any involvement.

Muslim groups in both Saudi Arabia and Britain believe there is a media campaign against the kingdom aimed at pressuring it to support an attack on Iraq.

-- Anonymous, August 19, 2002