Business jets used as payment to Saudi government by Ritz-Carlton detainees

Alasdair Whyte
By Alasdair Whyte March 13, 2018 10:55

Business jets used as payment to Saudi government by Ritz-Carlton detainees

Several business jets have been given to the Saudi Arabian government as settlement by individuals who were detained in the Riyadh Ritz-Carlton as part of a so-called anti-corruption crackdown.

Around 200 business people and members of the Saudi royal family were detained in November with most being released in January. A significant number of the people in the Ritz-Carlton owned business jets with several being arrested after their private aircraft had landed at Riyadh airport.

The Saudi attorney general says that 381 individuals were arrested. Some 56 are still in custody.

Some were released without charges, with others reaching financial agreements with the government. A statement released by the Saudi Press Agency said: “The attorney general has indicated that the estimated value of settlements currently stands at more than SAR 400 billion ($1 billion) represented in various types of assets, including real estate, commercial entities, securities, cash and other assets.”

These assets include a significant number of large business jets. “Principals that cannot meet monetary demands were asked to hand over assets, including aircraft, art, real estate, fancy cars, etc as compensation,” says one business aviation consultant with Saudi clients.

It is unclear how many business jets were handed over as part of the settlement. “We have heard that it could be as many as 30 aircraft,” says one Saudi-based market expert. “We have been told that they (the state) will no longer take business jets as they have too many.”

Some aircraft that have been transferred also been financed by international banks. These banks are now demanding that aircraft be returned to them.

Banks own title to the aircraft so could seize any aircraft that flies outside Saudi Arabia for maintenance or flights. The country has also ratified the Cape Town Convention, an international treaty that recognises the rights of aircraft financiers, but banks would rather use other courts.

“Part of the problem is that every lawyer in Riyadh tells you they are conflicted,” says one banker who believes an aircraft his bank financed has been transferred. “But we are taking this very seriously. The only thing that we have seen close to this is when an aircraft was seized by a government in Africa during a war.”

Lawyers say that financiers may also be able to claim that aircraft have been seized under their insurance policies.

Advisers say that they expect many Saudi Arabian owners to move aircraft out of the country and register them in different jurisdictions.


Also read: Many Saudi-owned aircraft still grounded after Ritz-Carlton crackdown

Alasdair Whyte
By Alasdair Whyte March 13, 2018 10:55

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