Riad Salameh arrest – turning point or strategic maneuver by former Lebanese central bank chief?

Analysis Riad Salameh arrest –  turning point or strategic maneuver by former Lebanese central bank chief?
Former Lebanese central bank chief Riad Salameh, who was arrested on Tuesday over alleged financial crimes. AP Photo/Hussein Malla/File
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Updated 05 September 2024
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Riad Salameh arrest – turning point or strategic maneuver by former Lebanese central bank chief?

Riad Salameh arrest –  turning point or strategic maneuver by former Lebanese central bank chief?

RIYADH: The arrest of Riad Salameh, Lebanon’s former central bank governor, has sent shockwaves through Lebanon’s financial and political spheres. 

After over a year of intense scrutiny and numerous allegations of financial misconduct, Salameh’s apprehension is being closely analyzed from multiple perspectives.

Some believe his arrest might be an attempt to deflect attention from systemic failures within Lebanon’s financial sector, while others regard the arrest as a significant development many hold both views.

One banker, who chose to remain anonymous, provided a nuanced interpretation of the situation when speaking to Arab News.

“My initial reaction is that the government is seeking a scapegoat to avoid taking responsibility for the financial crash,” he said. 

Despite this, he acknowledged that Salameh was not entirely blameless.

The banker expressed skepticism about the effectiveness of the Lebanese judiciary in tackling high-profile financial crimes. 

“The Lebanese judiciary lacks impartiality,” he stated. “Their attempts to bring criminals to justice have been ineffective, and the judges’ lack of experience in financial investigations is significant.”

He also questioned the credibility of seeing the arrest as a gesture toward international bodies like the Financial Action Task Force and the International Monetary Fund. 

“I don’t believe this will help,” he said, referring to Lebanon’s tarnished reputation due to inaction. 

His concern reflects a broader skepticism about whether the arrest will lead to substantive reforms or merely serve as a symbolic act.

On the topic of investor confidence, the banker was pessimistic. He argued that the damage to Lebanon’s financial system had already been done and meaningful changes are needed to ensure a true recovery.

“Politicians need to take responsibility and move forward, even if it means making difficult decisions,” he said.




The entrance of Lebanon's central bank in March 2023, covered in graffiti by protesters over the liquidity crisis which started in 2019. Shutterstock

While Lebanon’s central bank is supposed to be an independent organization, the banker highlighted that the governor’s tenure was marked by a preoccupation with political decisions rather than focusing on the financial management crucial to the institution.

This raises a critical question: Is Salameh solely to blame for Lebanon’s financial turmoil, or is he just one component in a much larger system of mismanagement and corruption? 

According to the banker, the situation reflects a broader systemic issue. 

“The simple words to describe this are mismanagement and corruption to the highest level,” he said, adding: “The irony is that it hasn’t really stopped.” 

This perspective suggests that while Salameh’s arrest might address one aspect of the crisis, it does not tackle the deep-seated issues that have plagued Lebanon’s financial and political systems for years.

George Kanaan, honorary chairman of the Arab Bankers Association, echoed some of the sentiments expressed by the anonymous banker but also provided a critical perspective on Salameh’s alleged misconduct. 

Kanaan expressed a clear stance on the matter, and said:: “I think he deserves to be in jail, and I think he has clearly committed theft.” 

He lamented that the more substantial issue of financial mismanagement, which he believes is not prosecutable, is overshadowed by Salameh’s individual actions.

Another anonymous banker provided a detailed analysis of the political context surrounding Salameh’s arrest, suggesting several possible scenarios that could explain the timing and nature of this high-profile event. 

He posited that Salameh’s arrest might be linked to broader political maneuvers and speculated on three primary scenarios.

Firstly, the banker suggested that Salameh’s arrest might be part of a larger political deal, potentially positioning him as a scapegoat for the pervasive corruption among Lebanese politicians. “His arrest might be part of a broader political deal,” he said.

This theory hinges on the idea that Salameh could be sacrificed to placate public outrage and international pressure, thereby protecting other, more powerful figures who may be equally or more culpable. 

The banker pointed out that Ali Ibrahim, the financial prosecutor of Beirut — who is reportedly a protégé of the head of the country’s parliament Nabih Berri — has just pressed charges of fraud and money laundering against Salameh. 

Berri was once one of Salameh’s major protectors, which adds a layer of complexity to the current political dynamics.

Another scenario proposed is that Salameh might have felt personally endangered and decided to turn himself in as a form of self-preservation. 

The banker highlighted that Salameh had been publicly summoned over the past 13 months but had consistently failed to attend hearings. 

His arrest, surrounded by high levels of secrecy and occurring without the presence of his legal team, could indicate that he feels safer in jail. 

“He might be feeling endangered due to threats, and he decided to turn himself in so he would be protected behind cell bars,” he noted.

The third scenario was that Salameh’s arrest could be a prelude to a future clearing of his name. 

According to this view, the arrest might be part of a strategy to demonstrate that the Lebanese judiciary is taking significant actions against high-profile figures. 

If Salameh is eventually declared innocent, it could imply that the Lebanese judiciary system has conducted a thorough investigation and that Salameh’s arrest was a procedural step rather than an indictment of his guilt. 

“He was arrested to be cleared and declared innocent at a later stage,” the banker suggested. 

This would signal that the judiciary is making a concerted effort to address corruption, albeit in a way that ultimately exonerates Salameh.

The banker emphasized that Salameh’s role as the central figure in Lebanon’s financial system adds considerable weight to these scenarios. 

“He is the secret keeper of all the financial transactions that happened in Lebanon,” he said, underscoring the pivotal role Salameh played in managing and orchestrating financial dealings. 

His deep involvement in the financial system and knowledge of sensitive transactions make him a key figure in understanding Lebanon’s financial mismanagement, which further complicates the political and legal landscape surrounding his arrest.

Legal analysis: implications and challenges

Jihad Chidiac, a Lebanon-based attorney, said the country was “positively surprised” by the arrest, but raised questions about its broader implications. 

He noted that Salameh’s prosecution in Lebanon could potentially preclude further international legal actions due to the principle of non bis in idem, or double jeopardy.




Lebanon-based attorney Jihad Chidiac. File

Chidiac highlighted the significance of the arrest in the context of Lebanese judicial capacity, saying: “Riad Salameh’s arrest represents a crucial step toward accountability of high-profile figures for alleged financial crimes.”

He also addressed the potential for the arrest to influence Lebanon’s relationship with international bodies. 

According to the attorney, the arrest could be a strategic move to align with international expectations and potentially improve Lebanon’s standing with the FATF and IMF. 

However, he cautioned that the arrest alone might not significantly advance Lebanon’s negotiations with these bodies, given the slow progress on reforms.

Chidiac expressed concerns about the broader impact of Salameh’s arrest on corruption and financial mismanagement in Lebanon. “Addressing these systemic problems will require a more comprehensive and sustained approach,” he said, emphasizing the need for effective legal actions and institutional reforms.

The attorney emphasized that while this case sets a new precedent — given that no other high-ranking figures have faced similar legal actions before — the eventual outcome remains uncertain. 

He highlighted the concern that if Salameh were to disclose crucial information, it could potentially jeopardize a large number of public and prominent figures. 

This adds an extra dimension to the case, as the ramifications of his revelations could be far-reaching.

“The possibility of such disclosures raises significant concerns about the stability of Lebanon’s political and financial institutions, and how they might react to protect themselves from further exposure,” Chidiac said.

Amine Abdelkarim, a criminal law specialist, echoed that reaction, as he argued that Salameh’s arrest was long-overdue. 

“The arrest of Riad Salameh is a purely legal act that should have occurred years ago. However, political interference prevented it,” he said.

Abdelkarim noted that “since the economic crisis and the October 17 revolution, European countries like Belgium, France, and Germany have pursued Salameh for crimes related to money laundering and illicit enrichment.”

Lebanon now faces a pivotal moment, as its judiciary must undertake a serious investigation into what Abdelkarim calls “the largest financial crime Lebanon has witnessed since its establishment, and perhaps the largest global financial crime at the level of a sovereign state.” 

The integrity of this process is underscored by Abdelkarim’s confidence in the investigative judge, Bilal Halawi, who he believes is key to ensuring the judiciary’s credibility.

Abdelkarim also touched on Lebanon’s complex relations with foreign nations, particularly European countries that have issued arrest warrants for Salameh. 

He noted that these countries are likely to demand Salameh’s extradition, creating a legal dilemma for Lebanon. 

“We cannot predict how relations might evolve if Lebanon refuses to hand over Salameh for prosecution abroad,” the law specialist said as he reflected on the diplomatic and legal challenges that lie ahead.

Regarding the possibility that Salameh’s arrest is part of a broader political negotiation, Abdelkarim expressed caution. 

While he acknowledged that such a scenario is possible, he doubted that Salameh would accept being the sole scapegoat for the financial collapse. 

“There are many political figures involved with Salameh, and I don’t believe he will be the only victim,” he remarked, leaving room for further developments in the political and legal fallout from the arrest.

On the potential for Salameh’s arrest to trigger broader reforms, Abdelkarim was cautiously optimistic. 

“This may lead to a correction in the way state funds are managed,” he said, noting that international pressure could push Lebanon toward necessary reforms. 

However, he tempered this optimism by acknowledging the political deadlock in Lebanon, particularly the ongoing failure to elect a new president, which may delay meaningful change.

From a legal perspective, Abdelkarim outlined the key charges against Salameh, including embezzlement of public funds, money laundering, and illicit enrichment. 

He warned of possible legal maneuvers by Salameh to obstruct the investigation, such as withholding crucial documents. 

Abdelkarim emphasized the need for judicial reform, particularly the passage of the judicial independence law, which has been stalled in parliament for years.

As Lebanon grapples with these developments, the effectiveness of the judiciary in handling such high-profile cases will be closely watched. 

It could serve as a litmus test for the country’s commitment to tackling corruption and restoring public trust in its institutions. 

The coming days will be crucial in determining whether this arrest will lead to meaningful reform or merely serve as a symbolic gesture.


Closing Bell: Saudi main index slips to close at 10,945 

Closing Bell: Saudi main index slips to close at 10,945 
Updated 24 July 2025
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Closing Bell: Saudi main index slips to close at 10,945 

Closing Bell: Saudi main index slips to close at 10,945 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Thursday, falling 38.13 points, or 0.35 percent, to close at 10,945.80. 

The total trading turnover of the benchmark index reached SR4.92 billion ($1.31 billion), with 112 stocks advancing and 137 declining. 

The Kingdom’s parallel market Nomu gained 120.10 points, or 0.45 percent, to close at 26,898.25. A total of 49 listed stocks advanced, while 24 retreated. 

The MSCI Tadawul Index also edged down, losing 3.66 points, or 0.26 percent, to close at 1,408.07. 

The best-performing stock of the day was Saudi AZM for Communication and Information Technology Co., whose share price surged 9.96 percent to SR29.14. 

Other top performers included Northern Region Cement Co., which saw its share price rise 6.29 percent to SR8.11, and Obeikan Glass Co., which climbed 6.20 percent to SR37.

Sport Clubs Co. recorded the most significant drop, falling 7.34 percent to SR10.22. 

Gulf Union Alahlia Cooperative Insurance Co. also saw its share price decline by 4.56 percent to SR14.22. 

National Medical Care Co. dropped 3.51 percent to close at SR164.80. 

On the announcements front, Electrical Industries Co. released its interim financial results for the period ending June 30.

According to a Tadawul statement, the company recorded a net profit of SR260 million during the first six months of the year, reflecting a 47.9 percent rise compared to the same period a year earlier. The increase in net profit was attributed to a broader product mix and higher sales of items with stronger profit margins. 

Electrical Industries Co. ended the session at SR8.99, down 2.21 percent. 

Alinma Bank also announced its interim financial results for the first half of the year. A bourse filing revealed that the company recorded a net profit of SR3.08 billion in the period ending June 30, up 12.8 percent year on year.

This increase was primarily linked to growth in total operating income. Net income rose as operating income expanded by 8.5 percent, driven mainly by higher returns from financing and investments, along with increased fee and foreign exchange income. 

The bank also announced the board of directors’ recommendation to distribute SR746 million in cash dividends to shareholders for the second quarter of 2025.

According to a Tadawul statement, the total number of shares eligible for dividends stood at 2.4 billion, with a dividend per share of SR0.30 after the deduction of Zakat. The dividend represented 3 percent of the share’s par value. 

Alinma Bank closed the session at SR26.38, down 1.60 percent. 


Saudi Arabia signs $6.4bn investment deals with Syria to boost reconstruction

Saudi Arabia signs $6.4bn investment deals with Syria to boost reconstruction
Updated 24 July 2025
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Saudi Arabia signs $6.4bn investment deals with Syria to boost reconstruction

Saudi Arabia signs $6.4bn investment deals with Syria to boost reconstruction

RIYADH: Saudi Arabia has signed investment deals worth $6.4 billion with Syria, marking a significant step in the Kingdom’s efforts to re-engage economically with the war-ravaged country and support its reconstruction drive. 

The agreements, spanning sectors such as real estate, telecommunications, and finance, were unveiled by Investment Minister Khalid Al-Falih during the Syrian-Saudi Investment Forum held in Damascus on July 25. 

The forum highlights Saudi Arabia’s strong commitment to strengthening Syria’s financial landscape. In April, the Kingdom joined Qatar in settling the country’s $15 million debt to the World Bank. 

“During this forum, we will witness the signing of 47 agreements and memoranda of understanding with a total value approaching SR24 billion ($6.4 billion), said Al-Falih. 

The deals include $1.07 billion in the telecommunications sector, with Syria’s Ministry of Communications and several Saudi telecom companies aiming to deepen bilateral ties. 

Companies involved in the plans include Saudi Telecom Co., GO Telecom, digital security firm Elm, cybersecurity company Cipher, and education technology firm Classera. 

In the real estate and infrastructure sectors, deals worth $2.93 billion were announced, including the construction of three new Saudi-financed cement plants to support Syria’s reconstruction efforts. 

The two nations also agreed to enhance cooperation in agriculture. 

“In the agricultural sector, we look forward to collaborating in Syria to develop high-quality joint projects, including model farms and processing industries,” said Al-Falih. 

In finance, a memorandum of understanding was signed between the Saudi Tadawul Group and the Damascus Securities Exchange to boost cooperation in the fintech sector. 

Al-Falih also announced the formation of a Saudi-Syrian Business Council, which is expected to further strengthen trade and economic ties between the two countries. 

Speaking at a separate panel discussion during the forum, Al-Falih said Syria is evolving into a more investment-friendly destination, despite ongoing challenges. 

“Syria is leaping forward as an investment-attractive country despite all challenges. Since the beginning of its new era, we have witnessed a genuine desire to provide investment opportunities for Saudi businessmen,” he added.


Al-Ansar, Al-Kholood, and Al-Zulfi football clubs offered in first wave of Saudi IPOs 

Al-Ansar, Al-Kholood, and Al-Zulfi football clubs offered in first wave of Saudi IPOs 
Updated 24 July 2025
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Al-Ansar, Al-Kholood, and Al-Zulfi football clubs offered in first wave of Saudi IPOs 

Al-Ansar, Al-Kholood, and Al-Zulfi football clubs offered in first wave of Saudi IPOs 

RIYADH: Saudi Arabia’s Ministry of Sport has announced the privatization of three football clubs — Al-Ansar, Al-Kholood, and Al-Zulfi — marking the first set of teams offered to the public through initial public offerings. 

The move represents a significant milestone in the Kingdom’s initiative to open the sports sector to private investment and ownership. The IPOs also follow a broader privatization program launched last August.

The ownership of the three clubs will transfer to private entities: Al-Zulfi to Nujoum Al-Salam, Al-Kholood to Harburg Group, and Al-Ansar to a joint venture between Audat Al-Biladi and Ayana. 

The ministry, in cooperation with the National Center for Privatization, carried out the transfers after completing regulatory requirements and corporate restructuring, the authority stated.

“The National Center for Privatization carried out the necessary procedures to establish club companies and transfer their ownership to the new owners,” the statement said. 

In parallel, the ministry announced that the submission window for the acquisition of Al-Nahda Club has closed, although the evaluation process is still ongoing. Some investment entities requested an extension, and the ministry confirmed it is still reviewing these proposals. 

The body affirmed its commitment to ensuring the success of the privatization process, stating that “it is keen to ensure the success of the privatization process and to confirm that the submitted offers serve the interests of the clubs and their sporting future, contribute to advanced models, and achieve the strategic objectives of the project.” 

It also noted that “the other entities interested in acquiring clubs (notably Al-Orobah and Al-Washm) did not meet the required procedures and conditions for acquisition.” 

Furthermore, the ministry announced that applications are now open for those wishing to acquire other Saudi sports clubs. 

Interested parties can apply via the ministry’s official website, where they will undergo a multi-stage process including qualification screening, financial analysis, and competitive bidding.


Pakistan central bank has room to slash interest rate by 100bps by December — analysts

Pakistan central bank has room to slash interest rate by 100bps by December — analysts
Updated 24 July 2025
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Pakistan central bank has room to slash interest rate by 100bps by December — analysts

Pakistan central bank has room to slash interest rate by 100bps by December — analysts
  • Central bank’s Monetary Policy Committee to meet on July 30 to announce policy rate
  • Rate cut to reduce financing costs, boost productivity and support recovery, says analyst

KARACHI: Pakistan’s central bank has room to slash the key interest rate by 100 basis points by December, financial analysts said on Thursday, noting that the move would reduce financing costs and boost productivity in the country.

The central bank’s Monetary Policy Committee (MPC) is scheduled to hold its meeting on July 30 to decide about the key interest rate. A majority of financial market participants expect the central bank to cut its key interest rate by 50 to 100 basis points next week, as per a report by Karachi-based brokerage firm Topline Securities. A majority, 56 percent, expect a 50 to 100 basis points rate cut next week, the report said while thirty-seven percent expect the policy rate to remain unchanged at 11 percent.

The findings reflect growing market confidence that declining inflation and easing global oil prices have created space for monetary easing. In its last meeting, the State Bank of Pakistan (SBP) kept the policy rate unchanged at 11 percent, citing uncertainty over the federal budget and regional tensions in the Middle East. This time, a stronger consensus appears to be building toward a rate cut.

“We are expecting inflation to average 5-7 percent in FY26, leaving a room of a total of 100 basis points cut in our view after adjusting it for real rate of 400 basis points,” Shankar Talreja, Topline Securities’ head of research, told Arab News.

Talreja said he expected the SBP to announce a policy rate cut of 50 basis points when it meets next week.

“We are expecting the policy rate to bottom out at 10 percent by December 2025,” he said.

Shahid Ali Habib, the chief executive officer at brokerage research firm Arif Habib Ltd., said he also expected the interest rate to be slashed by 50 basis points. The SBP has slashed the key policy rate by an aggressive 11,000 points from a record 22 percent over the last one year, as inflation eases in the South Asian country.

“A rate cut now could reduce financing costs, boost productivity and support recovery after a modest 2.68 percent GDP growth in FY25,” Habib said.

The expectations come as Prime Minister Shehbaz Sharif’s government aims to increase the GDP of Pakistan’s debt-ridden economy by 4.2 percent this year, up from the 2.7 percent last fiscal year.

Backed by the International Monetary Fund’s $7 billion loan, Pakistan’s economy has stabilized in recent months with inflation ebbing to 3.2 percent in June and the current account showing a surplus of $328 million last month.

Pakistan’s easing inflationary pressures have been the main driving force behind the central bank’s aggressive policy rate cuts. Habib said Pakistan’s macroeconomic situation was improving, saying that he sees FY26 inflation averaging on 5.4 percent and core inflation at around 8 percent this fiscal year.

However, Talreja said the decline in borrowing costs could be a “non-event” for Pakistan’s booming stock market, which has already factored in the expected change.

Pakistani stocks have risen 19 percent since January with the benchmark KSE-100 Index hitting a record 140,585 points during intraday trading last week, according to the Pakistan Stock Exchange data.

“The majority of the impact is already taken by the markets, the treasury bills are trading at 10.7 percent which already incorporates around 50 basis points cut,” Talreja noted.

Talreja said if slashed further, the policy rate will nonetheless provide some respite to businesses as the cost of financing will further come down.

“Honestly, either 50 or 100 basis points won’t matter significantly as we have already eased over 11,00 basis points in the last one year,” the analyst said.


Saudi economy minister holds global talks to boost bilateral ties, economic cooperation

Saudi economy minister holds global talks to boost bilateral ties, economic cooperation
Updated 24 July 2025
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Saudi economy minister holds global talks to boost bilateral ties, economic cooperation

Saudi economy minister holds global talks to boost bilateral ties, economic cooperation

RIYADH: Saudi Arabia’s Minister of Economy and Planning is intensifying global engagement through a series of high-level meetings aimed at strengthening bilateral relations and economic cooperation with key international markets.

On the sidelines of the UN’s High-level Political Forum on Sustainable Development 2025, Faisal Al-Ibrahim met with his Ethiopian counterpart, Fitsum Assefa, to discuss enhancing bilateral economic, commercial, and investment ties and other topics of mutual interest, according to a statement.

This supports the ministry’s goal to advance Vision 2030 by fostering economic diversification, attracting investment, and strengthening the national economy.

Its main priorities include crafting long-term strategies, aligning policies to ensure sustainable growth, and identifying strategic opportunities, as well as promoting data-driven policymaking, enhancing economic expertise, and building institutional capacity.

In a post on X, the ministry noted: “Minister of Economy and Planning meets with Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary, to discuss strengthening trade and development ties between the two countries, and other topics of common interest, on the sidelines of HLPF25.”

Al-Ibrahim also met with Ireland’s Minister for Climate, Environment, and Energy, and Minister for Transport, Darragh O'Brien, to review enhancing collaboration in economic policy, trade, and development, as well as exploring potential investment opportunities under Saudi Vision 2030.

He also held talks with the Minister for Regional Development of the Czech Republic, Petr Kulhanek, to discuss regional and infrastructure development, sharing best practices in sustainable growth, and exploring opportunities for economic expansion.

Additionally, the minister held talks with Beatriz Carles de Arango, Minister of Social Development of Panama, to explore collaboration on sustainable development, social protection strategies, and advancing shared priorities for human capital investment.

“I had the pleasure of meeting Mohammad Ishaq Dar, Deputy Prime Minister and Minister for Foreign Affairs of Pakistan at HLPF25, to discuss deepening bilateral economic ties, enhancing public policy coordination, and promoting sustainable growth,” Al-Ibrahim said on his X account.

The minister also met with Larry Fink, chairman and CEO of BlackRock, to explore expanding investment opportunities in the Kingdom.