LONDON, 30 November 2002 — The Times yesterday quoted Prince Alwaleed ibn Talal as saying some Saudi investors would panic and sell US investments because Saudi Arabia was portrayed by some Western media as not cooperating with the United States in its “war on terror”.

Alwaleed’s comments to the Times came after he denied a report in August of Saudi “panic selling” of US investments.

At the time, he did not see an outflow of Saudi funds from the United States in reaction to perceived anti-Saudi sentiment.

“When you have Saudi Arabia being portrayed as not cooperating fully with the US some Saudi investors will panic and leave. Inevitably, some funds will be withdrawn and some assets will be liquidated and these investors will move to other regions of the world,” Alwaleed was quoted yesterday as saying in an interview.

Alwaleed did not offer an estimate of the scale of any withdrawal of funds, but said a forecast in August of $200 billion was “far too high”, the Times reported.

He said: “These investors will go to Europe or Japan or Latin America or bring back their money to the Middle East. But not in the amount that people have claimed, nothing like $200 billion.”

Alwaleed said reports that donations by a member of the Saudi Royal family, Princess Haifa Al-Faisal, might have found their way to the Al-Qaeda network, the key US suspect in the Sept. 11 attacks last year, had not helped relations between Riyadh and Washington, the Times reported.

He said these reports, combined with uncertainty over whether Riyadh would permit the United States to mount airstrikes on Iraq from its Saudi air bases, were forcing both sides to re-examine their relationship, the Times said.

“I believe in American systems and I believe in what America does, but they do make mistakes. The only quarrel between Saudi Arabia and the US relates to what is happening to the Palestinians,” Alwaleed said.

“The relationship between the US and Saudi Arabia is very strong; these words have come from both President Bush and Crown Prince Abdullah. But clearly we are going through a tough period,” Alwaleed added.

Alwaleed has vowed never to sell a single stock of his US holdings for political reasons. He has a stake in Citigroup Inc. worth several billion dollars.

Alwaleed said he would not sell his US stock even if he believed the media companies in which he invests, including AOL Time Warner and News Corp, portrayed Arabs or Muslims in an unflattering light.

“I believe that engagement is the only right thing to do, not selling out,” Alwaleed told the Times.

In London, the euro remained firm against the dollar in late trading yesterday, underpinned by concerns that Saudi investors may pull money out of the US economy, analysts said.

“The market is getting worried that Arab money would pull out of the States because they fear that their accounts would be frozen if there was another terrorist attack,” said Hans Redeker, global head of foreign exchange strategy at BNP Paribas. (R)