Saudi investors 'pull out of US'

Withdrawals by individual Saudi investors may amount to $200bn, contributing to the recent falls in the dollar, one analyst told the Financial Times newspaper.

Saudis have reacted with anger to a lawsuit for damages filed last week by families of 11 September victims against Saudi banks and charities.

Assets have been moved to European accounts, the newspaper said.

The recent decline in US financial markets is given as a further incentive for the reported withdrawals.

"People no longer have any confidence in the US economy or in US foreign policy," said Bishr Bakheet, a financial consultant in the Saudi capital, Riyadh.

"And if the latest lawsuit is not thrown out in court, it will mean no more Saudi money in the US."

Saudi anger

An official at Al-Rajhi Investment and Development Corp, one of the Saudi banks named in the lawsuit, dismissed it as an "act to extort Saudi money" and "meddling in the region".

Saudi investors are believed to have invested about $750bn in the US.

Relatives of 900 victims of the 11 September attacks are seeking damages of more than $1,000bn in the civil suit filed in a Washington court last Thursday.

The suit accuses three senior Saudi princes, several Saudi and other foreign banks and Sudan's Government of funding Osama bin Laden.

One of the princes accused is Defence Minister Prince Sultan, the kingdom's third-highest official.

A lawyer for the families, Ron Motley, explained that the $1,000bn-plus damages claim was calculated by multiplying the number of plaintiffs by the average award of $30m in such cases and then again by three.

He cited a federal law which says that damages can be tripled for victims of terrorist crimes.

Riyadh has yet to officially comment on the lawsuit while a Sudanese government minister dismissed the allegations against Khartoum.

Strained relations

Fifteen of the 19 men who hijacked planes on 11 September have been identified as Saudi, but the country's government has repeatedly stressed it was not involved in the attacks.

The lawsuit alleges Saudi money has "for years been funnelled to encourage radical anti-Americanism as well as to fund the al-Qaeda terrorists".

Riyadh's refusal to allow the US to use its territory to attack Iraq and repeated criticism of pro-Israel US bias have strained relations between the oil superpower and Washington.

The FT writes that accusations that Saudi Arabia's austere brand of Islam breeds terrorism and its charities finance al-Qaeda have been perceived in the kingdom as attacks on Saudi society and its religion.