The man, who was licensed by the Saudi Arabian General Investment Authority (SAGIA) to run a construction and décor company, is also accused of not paying his workers’ salaries and rental fees for his company’s office and residential facilities.
The man, a European national of Middle East origin, was able to use his SAGIA license to obtain contracts from a number of Saudis to build residential compounds, Al-Riyadh Arabic newspaper reported on Saturday.
He, however, disappeared without finishing the projects and left a large number of foreign construction workers under his sponsorship in the lurch.
Many of these workers have not been paid their salaries, and with the investor’s absence are unable to renew their residency documents or leave the Kingdom on final exits.
His victims also include a number of wholesale dealers of construction materials, who claim that checks issued to them by the businessman bounced.
The issue has once more brought to light the need to have an effective mechanism that would make it incumbent on foreign investors to furnish necessary bank guarantees before being awarded project contracts.
The Ministry of Finance had earlier directed all concerned government agencies and departments to verify bank guarantees issued by investors before handing out payments for projects.
The ministry’s move comes after a number of complaints were made that some bank guarantees had been forged and that most of these had been given by foreign investors.
Contractors generally get 20 percent of project costs in the first installments that they receive on presenting bank guarantees.
Illegal practices by some foreign investors have prompted many people to express doubts about how much SAGIA is able to protect people’s rights.
“SAGIA’s issuance of licenses to foreign investors, something that allows them to freely engage in business dealings in the country, has been blamed for the cheating and swindling that is going on,” said one commentator, who did not want to be identified.
