Contributed by Jim Hayes
Rupert Murdoch and his empire has been caught in Saudi Arabia’s purge of members of the royal family, government ministers and officials.
Although the move is described an anti curruption purge by the dominant faction in the kingdom, around crown prince Mohammed bin Salman, is really a political battle secure the crown. Although the son of the present King Abdullah , under the complex family arrangements, he is not first in line according to tradition. This falls to cousin Prince Mohammed bin Nayef and it is those around him who are in the firing line.
Mohammed bin Nayef is the son of the present King’s half brother King Fahd, who died in 2005. Soon after taking the crown, the new king replaced his successor with his own son. This has divided the royal family and the 32 year old Salman’s reputation, for wanting to modernise Saudi society has raised the ire of traditionalists.
This is a big family, which includes an army of princes. Eleven of them have been caught up in the purge and arrested, along with four ministers and dozens of ex ministers. All are being held at the Ritz-Carlton hotel in the diplomatic quarter of the capital city, Riyadh.
One of these princes happens to be Alwaleed bin Talal. He is a billionaire in his own right. His net worth is estimated at $22 billion and his share portfolio includes major stakes in Apple, Twitter and Citigroup, Saudi lender Banque Saudi Fransi and France’s Credit Agricole. He owns the Savoy Hotel in London.
He also owns a share in the Murdoch empire’s parent company 21st Century Fox. This is important, because the Murdoch family only own 14 percent of the shares, and are dependent on key allies to maintain control against hostile takeover bids. This is despite a voting system that ensures Murdoch control over the decision making, through the division of shares into voting and non-voting. The family therefore have direct control over more than one third of the votes. But because this is less than half, they also depend on a block of allies.
This is where Alwaleed bin Talal comes in. He holds 5 percent of the shares and this is enough to ensure Murdoch dependency on the prince’s vote.
The strength of the prince’s position was shown when it was reported that during the UK phone tapping scandal, the Prince demanded a head or two. Murdoch subsequently sacked a few of his closest aids.
The prince’s arrest means that maintaining the security of the his vote has become problematic. Shareholder activists are moving to have the two share types of shares removed, so that all shareholders will get the right to vote. If this succeeds, the Murdochs could lose control.
Wouldn’t it be wonderful
Oh please make it happen!
Beautiful ,couldn’t happen to a nicer family