Saudi PIF Suspends PwC from Advisory Services for One Year

The Public Investment Fund (PIF) of Saudi Arabia has suspended PricewaterhouseCoopers (PwC) from advisory roles for one year without publicly stating reasons. PwC has established a significant presence in Saudi Arabia and is a key player in the Middle East’s consulting market. Despite overall growth in the region, the decision comes amid a backdrop of broader economic headwinds affecting global consulting firms.

The Public Investment Fund (PIF) of Saudi Arabia has prohibited PricewaterhouseCoopers (PwC) from engaging in advisory services for one year. This decision was communicated via messages to the fund’s portfolio companies, although the PIF did not disclose its reasons for the move. While representatives of the fund refrained from providing comments, a spokesperson for PwC did not respond to inquiries regarding the matter.

This directive follows PwC securing a license to establish its regional headquarters in Saudi Arabia two years prior, where it currently employs over 2,000 individuals across cities such as Riyadh, Jeddah, AlUla, Al Khobar, and Dhahran. The firm maintains operations in more than 20 locations throughout the Middle East.

PwC’s comprehensive non-audit services encompass areas such as mergers and acquisitions, tax advisory, and strategic consulting. The Middle East market represented the fastest growth segment for PwC UK in the most recent fiscal year, highlighting the region’s significance in the firm’s global operations.

In the fiscal year concluding on June 30, the Middle East generated £1.97 billion (approximately $2.5 billion) in revenue for PwC. This marked a 26% increase from the previous year. Although PwC anticipates continued solid revenue growth in the region, it acknowledged the possibility of not achieving the same levels as in the past.

The Saudi PIF plays a crucial role in the nation’s economic transformation outlined in Vision 2030, having created about 100 portfolio companies. These include significant ventures such as Neom, a $1.5 trillion city project. Such developments are vital for the consulting sector, particularly as PwC navigates a broader global slowdown in demand for consulting services and a contraction in revenue within its Australian and Chinese markets.

The Saudi Arabian Public Investment Fund has blocked PwC from any advisory work for one year, a move that remains unexplained. Despite PwC’s strong performance and growing presence in the region, this development could impact the firm’s future prospects in Saudi Arabia, particularly as the PIF drives economic initiatives through Vision 2030. The consulting sector, facing a global slowdown, may feel the effects of this decision, emphasizing the PIF’s critical position in business growth within the kingdom.

Original Source: m.economictimes.com