The Virgin Group, the parent company of Virgin Galactic and Virgin Orbit, has withdrawn from all discussions over a U.S.$1 billion investment in its space activities with Saudi Arabia’s Public Investment Fund (PIF) following the alleged torture and murder of dissident Saudi journalist Jamal Khashoggi in the Saudi Consulate in Istanbul, Turkey, on 2 October 2018.
Led personally by Sir Richard Branson, the founder and chairman of Virgin Group, the UK-based company had been courting not just Saudi sovereign wealth funds such as PIF regarding investment in Virgin Galactic and Virgin Orbit, but had also established a close relationship with the young Crown Prince of Saudi Arabia, Mohammed bin Salman, known as MbS, who is believed to have been behind the decision to target Khashoggi, though it is far from clear based on current reporting what the Crown Prince’s particular role and culpability in Khashoggi’s disappearance actually is.
In a statement issued on 11 October 2018, Sir Richard Branson said:
I had high hopes for the current government in the Kingdom of Saudi Arabia and its leader Crown Prince Mohammed bin Salman and it is why I was delighted to accept two directorships in the tourism projects around the Red Sea. I felt that I could give practical development advice and also help protect the precious environment around the coastline and islands.
What has reportedly happened in Turkey around the disappearance of journalist Jamal Khashoggi, if proved true, would clearly change the ability of any of us in the West to do business with the Saudi Government. We have asked for more information from the authorities in Saudi and to clarify their position in relation to Mr. Khashoggi.
While those investigations are ongoing and Mr. Khashoggi’s whereabouts are not known, I will suspend my directorships of the two tourism projects. Virgin will also suspend its discussions with the Public Investment Fund over the proposed investment in our space companies Virgin Galactic and Virgin Orbit.
The announcement by Virgin Group comes as a growing number of Western companies, prominent industry leaders, and other personalities are distancing themselves from Riyadh following the disappearance of Khashoggi. These companies and individuals have close commercial relationships with Saudi Arabia, or sat on executive and advisory boards in Saudi companies and initiatives centered around Saudi Arabia’s Vision 2030 economic modernisation and diversification policies.
The withdrawal by Virgin from discussions with PIF leaves Aabar Investments of the United Arab Emirates as the only Middle Eastern investor in Virgin’s space enterprises. Virgin’s withdrawal from PIF discussions raises the question of where Branson intends to find U.S.$1 billion that PIF was looking to invest in his space tourism and satellite launch ventures, but the biggest question is about the future of Saudi’s Vision 2030 given its dependence and relationships with Western companies.