Probe into LIV Golf merger stalled amid US government intervention, Saudi officials warn of severe consequences

In a startling revelation, it has emerged that Saudi Arabia has issued threats of imprisonment to bankers and consultants engaged in the LIV Golf merger if they cooperate with a US Senate committee inquiry.

Reports indicate that the Public Investment Fund (PIF) took legal action in November, suing its advisers in a Saudi court to prevent information from being shared with the US Senate Committee on Homeland Security and Governmental Affairs. According to investment banker Michael Klein, individuals found in violation of the court order could face up to 20 years in prison.

US lawmakers have criticized advisers for their lack of cooperation with the inquiry, highlighting that only a fraction of the requested documents have been provided in response to a congressional subpoena. Testifying before the committee, Klein expressed concern over the unprecedented behaviour exhibited by the PIF, a client historically known for adhering to best practices of governance.

Klein’s testimony was supported by Rich Lesser from Boston Consulting Group, Bob Sternfals from McKinsey, and Paul Kleary from Teneo Strategy, who emphasized the risks of criminal and financial penalties for individuals and firms operating or residing in Saudi Arabia.

Amid these developments, the PIF released a statement asserting that the requested documents are unprecedented for a foreign sovereign entity. The statement emphasized the organization’s efforts to facilitate the production of information from advisers in compliance with Saudi laws.

Meanwhile, the PGA Tour approved a monumental $3 billion investment deal with Strategic Sports Group (SSG) just last week. SSG’s immediate cash injection of $1.5 billion, with the potential for further investment, highlights the significance of the deal. Additionally, nearly 200 PGA Tour members will have the opportunity to hold equity in PGA Tour Enterprises as part of an incentive to remain loyal amidst the ongoing merger talks with LIV Golf.

Despite these developments, merger discussions between the PGA Tour and LIV Golf are currently hindered by US government intervention, underscoring the complex and contentious nature of the situation.