Thousands flock to auction of vehicles owned by Saudi tycoon

An auction for vehicles and other possessions belonging to billionaire Maan Al-Sanea and his company in Dammam. (Reuters)
Updated 20 March 2018

Thousands flock to auction of vehicles owned by Saudi tycoon

DAMMAM: Thousands of people attended the first day of an auction of vehicles owned by indebted Saudi Arabian tycoon Maan Al-Sanea and his company, a sale which officials said will go toward repaying about SR18 billion ($4.8 billion) owed to creditors.
Authorities said the auction, the subject of huge interest in the Eastern Province where his business is based, reflects their focus on improving corporate governance and by extension Crown Prince Mohammed bin Salman’s commitment to economic reforms.
Creditors ranging from unpaid workers to local and international banks hope the process, which at a later stage will include sale of bigger assets such as property, will lead to repayment of at least part of their debt.
The businessman, ranked in 2007 by Forbes as one of the world’s 100 richest people, was detained by authorities late last year for unpaid debt dating back to 2009 when his company, Saad Group, defaulted on payments in what was Saudi Arabia’s biggest financial meltdown.
His case is separate from the dozens of Saudi businessmen and prominent figures who have been held in a corruption crackdown.
A three-judge tribunal established in 2016 to resolve Saad’s debt dispute late last year appointed a consortium called Etqaan Alliance to liquidate assets owned by the billionaire.
The first phase of the auction was launched this week, with around 900 vehicles including lorries, buses, diggers, forklift trucks and golf carts owned by Saad Group going under the hammer.
Later stages of the process will include other parts of his business empire and personal wealth including property — estimated at around SR10.3 billion, as well as machinery, ceramics and furniture, in auctions in the Eastern Province, Riyadh, Jeddah and Yanbu, said Abdulaziz Al-Rashid, head of Etqaan Alliance, a coalition of companies including two real estate companies, accountants and lawyers.
After a series of TV, online and billboard adverts run by Etqaan Alliance in recent weeks anticipation about the auction has been building. Roads around the auction site were jammed on Sunday afternoon as people queued to enter the dusty land plot where the event was taking place.
“Can you believe this man was once a billionaire and today he came to the ground level and has to start from scratch?” said a buyer of a forklift truck, giving his first name as Nasser.
Prospective buyers were mainly businessmen from local construction companies and other contractors.
“This auction gives a clear message that the court is serious to carry out the liquidation process of all assets to repay creditors,” said Al-Rashid. “We expect to finalize liquidation of all assets during this year.”
Money raised from the first phase of the auction, expected to be completed by the end of April, will go toward repaying creditors owed around SR18 billion, he said.
Some of the workers who hope to get paid through the liquidation process were among those attending the event.
Outside the court process, advisers to Saad Group recently asked some bank creditors to meet in Dubai in a bid to try to reach a consensual debt settlement on SR16 billion of claims, Reuters reported last week.
The advisers were seeking a deal before Saudi authorities make progress in the auction process.


Economists fear a US recession in 2021

Updated 19 August 2019

Economists fear a US recession in 2021

  • Trump’s higher budget deficits ‘might dampen the economy’

WASHINGTON: A number of US business economists appear sufficiently concerned about the risks of some of President Donald Trump’s economic policies that they expect a recession in the US by the end of 2021.

Thirty-four percent of economists surveyed by the National Association for Business Economics, in a report being released Monday, said they believe a slowing economy will tip into recession in 2021. 

That’s up from 25 percent in a survey taken in February. Only 2 percent of those polled expect a recession to begin this year, while 38 percent predict that it will occur in 2020.

Trump, however, has dismissed concerns about a recession, offering an optimistic outlook for the economy after last week’s steep drop in the financial markets and saying on Sunday, “I don’t think we’re having a recession.” A strong economy is key to the Republican president’s 2020 reelection prospects.

The economists have previously expressed concern that Trump’s tariffs and higher budget deficits could eventually dampen the economy.

The Trump administration has imposed tariffs on goods from many key US trading partners, from China and Europe to Mexico and Canada. 

Officials maintain that the tariffs, which are taxes on imports, will help the administration gain more favorable terms of trade. But US trading partners have simply retaliated with tariffs of their own.

Trade between the US and China, the two biggest global economies, has plunged. Trump decided last Wednesday to postpone until Dec. 15 tariffs on about 60 percent of an additional $300 billion of Chinese imports, granting a reprieve from a planned move that would have extended duties to nearly everything the US buys from China.

The financial markets last week signaled the possibility of a US recession, adding to concerns over the ongoing trade tensions and word from Britain and Germany that their economies are shrinking.

The economists surveyed by the NABE were skeptical about prospects for success of the latest round of US-China trade negotiations. Only 5 percent predicted that a comprehensive trade deal would result, 64 percent suggested a superficial agreement was possible and nearly 25 percent expected nothing to be agreed upon by the two countries.

The 226 respondents, who work mainly for corporations and trade associations, were surveyed between July 14 and Aug. 1. That was before the White House announced 10 percent tariffs on the additional $300 billion of Chinese imports, the Chinese currency dipped below the seven-yuan-to-$1 level for the first time in 11 years and the Trump administration formally labeled China a currency manipulator.

As a whole, the business economists’ recent responses have represented a rebuke of the Trump administration’s overall approach to the economy.

Still, for now, most economic signs appear solid. Employers are adding jobs at a steady pace, the unemployment rate remains near a 50-year low and consumers are optimistic. US retail sales figures out last Thursday showed that they jumped in July by the most in four months.