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Bin Laden business grew from humble beginnings

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Family came under scrutiny at home and abroad after 9/11
JEDDAH: In Saudi Arabia, the Bin Ladens are known as the Kennedys of Jeddah for their wealth and tragedies. They built Saudi Arabia’s roads, mosques and palaces. Family patriarch Mohammed died in a plane crash, as did the son who succeeded him. Younger son Osama plotted the 9/11 attacks on the United States.
Mohammed arrived in Saudi Arabia from Yemen during the 1920s as an impoverished teenager, blind in one eye. He sought his fortune amongst the pilgrims and hustlers of the Red Sea port of Jeddah. After founding a small construction firm in 1931, he won the favor of then King Abdulaziz by completing a palace for him within 20 days, according to a biography by former Saudi Binladin Group executive Khalaf Al Sibea. He became Saudi Arabia’s go-to builder, earning contracts for the kingdom’s most strategically significant projects.
As the conglomerate grew, the Bin Laden family, consisting of some 70 children and dozens of wives..

Family came under scrutiny at home and abroad after 9/11

JEDDAH: In Saudi Arabia, the Bin Ladens are known as the Kennedys of Jeddah for their wealth and tragedies. They built Saudi Arabia’s roads, mosques and palaces. Family patriarch Mohammed died in a plane crash, as did the son who succeeded him. Younger son Osama plotted the 9/11 attacks on the United States.

Mohammed arrived in Saudi Arabia from Yemen during the 1920s as an impoverished teenager, blind in one eye. He sought his fortune amongst the pilgrims and hustlers of the Red Sea port of Jeddah. After founding a small construction firm in 1931, he won the favor of then King Abdulaziz by completing a palace for him within 20 days, according to a biography by former Saudi Binladin Group executive Khalaf Al Sibea. He became Saudi Arabia’s go-to builder, earning contracts for the kingdom’s most strategically significant projects.

As the conglomerate grew, the Bin Laden family, consisting of some 70 children and dozens of wives, cultivated ties with King Abdulaziz’s sons and grandsons to secure the alliance’s longevity. Contracts were awarded and expanded through those relationships, rather than a formal bidding process. Many were bestowed on a cost-plus basis, in which the contractor earns a fee on top of expenses. The problem with this model is that there is often no incentive for the contractor to keep a lid on costs.

The family came under scrutiny at home and abroad after Sept 11, 2001, when Osama, one of Mohammed’s younger sons, brought notoriety to the Bin Laden name. Under the quiet stewardship of chairman Bakr bin Laden, the company kept its footing and the company went on to reach the height of its power during the reign of King Abdullah, who took the throne in 2005. During Abdullah’s 10-year rule, oil rocketed above $100 a barrel and the kingdom went on a spending spree. Saudi Binladin Group snared contracts to manage construction of new projects worth tens of billions of dollars, including a Riyadh financial district, a new airport in Jeddah and an economic city on the Red Sea coast meant to house 2 million people.

The company handled the kingdom’s most sensitive projects, including expansions of the two holy mosques in Mecca and Medina. For such deals, senior Bin Laden brothers, often Bakr, Saleh and Saad, held negotiations directly with King Abdullah and a special unit within government the monarch created for them, according to one Jeddah businessman who has known the family for decades. Those contracts generally involved Saudi Binladin Group’s “Rush Projects” division, designed to perform work at short notice for the government, he said. The rush division also handled construction of King Abdullah’s new palace in Jeddah.

Not far from that palace, Bakr built a villa of his own with marble corridors and swimming pools looking out onto the Red Sea, which he opened regularly for traditional all-male parties to cultivate the family’s royal relationships, said a source who attended one such event. As they prospered at home, the brothers expanded the business internationally, making particular inroads in Africa. Around 2011, they first floated the idea of an initial public offer of shares in the company, by then a behemoth with more than 500 subsidiaries.

With the company thriving, Bakr began to step into semi-retirement and spent much of his time at his mansion in Egypt’s Sharm al-Sheikh. He still managed the company’s relationship with the senior royals, hopping back over the Red Sea in his private jet for important meetings. According to a Saudi Binladin Group executive, succession at the company seemed sure to follow a clean path to Bakr’s brothers Saad and Mohammed, then down to the next generation via his son Nawaf. All of that changed on the night of Nov. 4, 2017 when Saudi Arabia launched its anti-corruption drive.- Reuters

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