Revealed: Saudi royals' secret $1bn US empire

BP and BAE Systems among the tenants of portfolio of properties associated with king's son Prince Abdul Aziz bin Fahd

Stephen Foley
Wednesday 06 June 2012 11:13
Comments

A secret $1bn US property empire amassed by members of the Saudi royal family is the subject of a bitter legal dispute that threatens to reveal the extent of the family's American business interests.

The oil giant BP and the British defence contractor BAE Systems are among the tenants of companies associated with Prince Abdul Aziz bin Fahd, the playboy son of the late King Fahd, according to court documents.

Lawyers for the companies are asking a judge to keep their ultimate ownership secret, but correspondence between the two sides currently remains on the record in a New York courthouse.

The documents reveal that over the past 15 years, Prince Abdul Aziz and a relative, Sheikh Khalid N Al Assaf, amassed a property portfolio that spans the US, from BAE offices in Reston, Virginia, near the capital Washington, to the headquarters of the television company Starz in California. They also purchased two of the four buildings in the office complex that BP uses as its US headquarters in Houston, Texas.

In an affidavit provided to the court by David Hill, a Texan real estate executive who says he helped manage the portfolio, it is claimed that the royal family held ownership of the properties through a complex network of foreign and US companies. Since 1996, Prince Abdul Aziz and his co-owners made a profit of $379m buying and selling properties in the US and they still own 15 complexes across nine states, for which they paid $978m, Mr Hill says.

The prince met his US property managers repeatedly * Los Angeles, the Bahamas, Cancun in Mexico, and at the Al-Yamamah royal palace in the Saudi capital Riyadh, according to the affidavit.

Prince Abdul Aziz is the youngest son of King Fahd, with a personal fortune estimated in the billions of dollars. He has few governmental responsibilities of his own, and his international playboy lifestyle was on show in another New York court earlier this year when one of his entourage was convicted of raping a woman at the swanky Plaza hotel, where the prince had rented more than 50 rooms.

The claims about the Saudi royal family's extensive US property holdings have come to light in a case in New York Supreme Court involving Mr Hill and a business partner, Howard Hallengren. The two men and the firms they worked for mismanaged the portfolio and took unapproved fees, it is claimed. The pair say the claims are untrue and are petitioning the court to prevent themselves being dragged into arbitration.

One of the claims is that their firm took illegal payments running into hundreds of thousands of dollars when BP negotiated with them to extend its lease in Texas in a new five-year deal worth $49m.

Lawyers for the portfolio companies, meanwhile, are fighting to keep the prince's identity secret. Naming the "ultimate and beneficial owners" is irrelevant because the case involves only US-incorporated entities, attorney Justin Garbaccio wrote to the judge, and Mr Hill and Mr Hallengren have named them "solely to harass and/or embarrass those parties... When faced with the instant application to seal [the names], petitioners took the opportunity in their response to repeatedly and gratuitously name said 'owners' as often as possible."

Lawyers for the two sides in the court case did not return phone calls requesting comment.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in