07 February 2024 , 23:35
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Saudi Arabia threatened to imprison bankers and consultants involved in a LIV Golf merger - if they cooperated with a probe by US lawmakers, an inquiry has heard.
Back in November, the Public Investment Fund sued its advisers in a Saudi court in order to prevent information from being submitted to the US Senate committee on homeland security and governmental affairs. If anyone violates the court order, they could be imprisoned for 20 years, according to investment banker Michael Klein.
US lawmakers have criticised the advisers for not cooperating with the inquiry, noting only a fraction of the documents demanded in a congressional subpoena have been brought forward. As quoted by Bloomberg, Klein said at a hearing held by the committee: “This represents aberrant behaviour for a client, and, quite frankly, for the PIF, who has historically been a client that has operated with best practices of governance with us.”
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Klein was testifying alongside Boston Consulting Group’s Rich Lesser, McKingsey’s Bob Sternfals and Teneo Strategy CEO Paul Kleary. Lesser added: “The PIF has been explicit that the disclosure of information relating to BCG’s work for PIF is a violation of Saudi law, which ‘imposes criminal penalties for disclosing or disseminating such information including imprisonment for a maximum of 20 years’. We risk criminal and financial penalties for the firm and for individuals working or living in Saudi Arabia.”
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PIF released a statement amid the reports, claiming the requested documents are ‘unprecedented’ when it comes to to ‘a foreign sovereign instrumentality’. The statement also read: “We have made, and are continuing to make, significant efforts to facilitate the production of requested information from our advisers consistent with the laws of Saudi Arabia, which should be recognised like those of any other country.”
PGA Tour commissioner Jay Monahan is overseeing the merger between his series and LIV Golf (Getty Images)Despite assurances in July that PIF would only be a minority investor in the combined entity, many still oppose LIV Golf. Last year, various US investors were being considered to help finance the deal and avoid any political complications.
Meanwhile, just last week, the PGA Tour approved a $3billion investment deal with Strategic Sports Group in a new commercial fund. SSG committed to an immediate cash injection of $1.5bn, and there is the potential for that investment to double over time.
The deal with SSG is immense and will give almost 200 PGA Tour members the opportunity to hold equity in PGA Tour Enterprises as part of a reward for staying loyal and shunning LIV Golf. Merger talks between the PGA Tour and LIV Golf are ongoing, although they are currently impacted by US Government intervention.
Mirror Sport have contacted PIF for comment.