The diary of a Saudi man, currently living in the United Kingdom, where the Religious Police no longer trouble him for the moment.

In Memory of the lives of 15 Makkah Schoolgirls, lost when their school burnt down on Monday, 11th March, 2002. The Religious Police would not allow them to leave the building, nor allow the Firemen to enter.

Friday, March 31, 2006

Saudi Share Purchase Made Easy 

The scene is again the Ministry of Finance, Ibrahim's office. AbdulAziz, the royal relative, MBA from the US Business College, is sitting upright, looking very pleased with himself. Saeed, the Bedu, is lying back in his chair, yawning and picking bits of wax out of an ear. Ibrahim, the manager, is slumped forward over his desk, looking depressed. An Indian guy, in light brown overalls, is invisibly watering the office plants.

Ibrahim is depressed because he's been looking forward to a comfortable retirement on his farm with his date trees and his camels, but he's just had a bollocking over the phone. A right royal bollocking, in fact. From a very senior royal person, who complained that his bright young royal relative, AbdulAziz MBA, had this brilliant idea for selling shares to expatriates, so restoring the fortunes of the stock market, but the whole exercise "has gone belly up like a dead cat", (Ibrahim winced at those particular words) and he, Ibrahim, had better do something about it, otherwise he's going to find some obscure Prince making an offer for his farm "that he won't be able to refuse", (for such is the way of things in Saudi Arabia*).

So Ibrahim has got the team together, to see if they can work out what the problem is. He turns first of all to Saeed for his thoughts.

Saeed contemplates a small ball of ear-wax between two fingers. He knows what the problem is, or rather who, it's just a matter of getting him to admit it, and he trusts members of the Royal House of Saud about as far as he can flick this ball of wax. Which he now does. And it's not very far indeed.

"We're dealing with expat men and women who don't have a lot of money and don't speak Arabic well. So we need to make the whole thing as simple for them as possible. AbdulAziz, you came up with the rules, what are they?"

AbdulAziz sit up and smirks even more. "Well, I've put processes in place that address the personal investment aspirations of the demographic segment in question whilst simultaneously affording the banks a due diligence capability to profile the potential customer segment's lifetime net worth, if you will."

Saeed imagined him trying to survive out in the desert for more than an hour, if his 4X4 broke down; or even just the air-conditioning. Ibrahim meanwhile slumped a bit lower. "So tell me", he asked, "how it works. Let's start with the "female expatriate demographic segment"".

"Oh, that's easy", smiled AbdulAziz, "the women can't invest themselves. Should they want to, although their responsibility really should be their home and family, they must do it thru their husband. We must respect the cultural norms of our traditional society, as you appreciate".

Ibrahim groaned inwardly, as he realized that 50% of his potential investor base had just been barred for life. "OK then, let's talk about the men. Presumably they go to the bank with their Iqama (expatriate identity card), hand their money over, and get the share certificate a few days later."

AbdulAziz nodded and smiled at Ibrahim, as though encouraging a slightly backward child. "Oh yes, identification is absolutely vital, there are international rules to prevent Money Laundering, as well as our internal need to make sure they are not illegal imigrants. So we need to see their Iqama. But of course, that could be a forgery, so we need to see the passport as well, just to double-check."

Saeed removed a digit from his other ear and interjected, although he already knew the answer. "But they get them back right away, don't they? Because if they're caught out in the street by the cops or the religious cops, without passport or Iqama, without any id at all, they'll be in deep trouble. Especially if they're a "Darkie"!"

The Indian invisibly stiffened for a moment, but the water continued to flow into the container of the rubber plant.

AbdulAziz looked indignant. "It's only for two working days! Or perhaps three. Maybe four. So if it's over the weekend, that's six days maximum. It's only a slight risk. And anyway", treating Saeed to a truly royal 'Look how gracious I am when condescending to talk to a grubby little Bedu' smile, added "All they need to do is to explain to the police that they are investing in our dynamic knowledge-based Saudi economy, which explains why they are foreigners with no identification, and the police will be completely understanding. And they will need the time to start on the other paperwork."

Ibrahim felt that he was losing the will to live. "Other paperwork?"

AbdulAziz looked at him, slightly disappointed, as though he was having difficulty with his animal alphabet cards again. "Of course! We can't just let them invest willy-nilly. These are foreigners, after all. We need someone responsible, a Saudi, to say that they are a fit and proper person to be allowed to buy our shares. So before anything else, they get their employer to fill out a form giving permission."

"And they take that to the bank as well?"

"Yes. But not right away, of course. Because that could also be a forgery. So first of all the form has to go to the local Chamber of Commerce, to be certified that the employer's company is a bona fide company."

Saeed examined a particularly large lump of wax. "That's not going to be quick, either", he remarked.

AbdulAziz bristled to himself. He was tempted to snap "Isn't it time you married your cousin and bred a pack of blind albino dwarfs?", but remembered that noblesse oblige, and instead put on his family's patient talking-to-the-backward-Bedu expression. "Three or four working days, at most. This is not a time to be making clerical mistakes out of haste."

"O.K.", said Ibrahim, now showing some signs of impatience, "But when that's done, he can buy his shares?"

"Of course, no problem."

"Just like that?"

"Just like that. Once all the paperwork is processed, he just takes his 100,000 Riyals to the bank, and buys his shares."

Ibrahim is now sitting bolt upright. "He's got to take 100,000 Riyals? THAT'S 26,000 DOLLARS!"

"Naturally", continues AbdulAziz, "We can't let just any any cheap foreign riff-raff buy our shares! These aren't Third World shares, they're Saudi Shares! They are only for men of wealth and standing!"

The Indian, with his back to the group, invisibly put the tip of his forefinger to the tip of his thumb, and made an extremely rude gesture.

"Let me make sure I understand this correctly", articulated Ibrahim carefully, looking as though he was having great difficulty with controlling himself. "If an expatriate sees some shares he wants to buy at a price he wants to buy them at, and so long as he's fortunate enough to be a man of course, all he has to do is wait up to two weeks in total for various items of paperwork to be completed? Then, assuming he's not been imprisoned in the meantime for not having an id, all he needs is a minimum of 26,000 dollars?"

He continued, very slowly and deliberately.

"Could that possibly explain why the banks' trading rooms look like the Imam University canteen on "All-you-can-eat Pork Chop Day?""

"Oh dear", AbdulAziz thought to himself, "Ibrahim's completely lost it. Can't handle the modern world, too much stress. He needs to be put out to pasture. Time for the new blood to come in and take over!"

Saeed's finger sought another orifice to explore.

If you imagine that I am perhaps exaggerating, or maybe wish to learn even more about the prerequisites for expatriates to buy Saudi shares, you can read further about it here.

* There are many tales, from reliable sources, of Saudi entrepreneurs building up profitable businesses, only to have minor royals decide that it's a good market to be in, come in, and buy them out at less-than-fair prices. Why do the businessmen accept? It doesn't take much persuasion when the purchaser belongs to a ruling family with total control over the police force and a legal system where you can just "disappear" for long periods of time. It's easier to sell up, start up again, and hope that next time they don't notice you.

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