Saudi Wealth Fund Restricts PwC’s Advisory Services for One Year

The Saudi Public Investment Fund has blocked PwC from providing advisory services for one year without stating the reasons. This decision follows PwC’s establishment of its regional headquarters in Saudi Arabia, where it employs over 2,000 people. Despite this setback, the Middle East remains a key area for PwC, which reported significant revenue growth in the region. The PIF’s role in Vision 2030 emphasizes its importance to consulting firms.

The Public Investment Fund (PIF) of Saudi Arabia has prohibited PricewaterhouseCoopers (PwC) from undertaking advisory work for a period of one year. Although the PIF did not disclose the reasons for this action in correspondence with its portfolio companies, representatives declined to comment on the matter and a spokesperson for PwC did not respond to inquiries regarding the situation.

PwC’s ban comes two years after the firm secured a license to establish its regional headquarters in Saudi Arabia, where it currently employs over 2,000 individuals across several cities including Riyadh, Jeddah, and Dhahran. The firm operates from more than 20 locations in the Middle East and has seen significant growth in the region.

Within its recent fiscal year, the Middle East emerged as the fastest-growing region for PwC UK, with its non-audit services encompassing mergers, acquisitions, and tax advisory. The region generated £1.97 billion ($2.5 billion) in revenue, marking a 26% increase from the previous year. The firm is optimistic about sustained revenue growth in the Middle East through 2025 and 2026, though it recognizes potential fluctuations in achieving last year’s revenue levels.

Business stemming from the Saudi wealth fund has proven essential for growth, positioning the PIF as a pivotal player in the kingdom’s Vision 2030 economic transformation initiative. This initiative includes approximately 100 portfolio companies, featuring ambitious projects such as Neom, a $1.5 trillion mega-city designed for the west coast, alongside developments aimed at enhancing historic sites into tourist destinations.

As the sector continues to manage an ongoing downturn, global growth for consulting firms like PwC is projected to slow in 2024, as demand wanes, particularly impacting revenue in Australia and China. This context highlights the significance of relations between the PIF and consulting firms like PwC for fostering economic development in the region.

The temporary ban on PwC’s advisory services by the Saudi Public Investment Fund highlights uncertainties in the consulting sector, particularly given the fund’s significant influence under Vision 2030. As PwC navigates challenges in global growth while having a strong foothold in the Middle East, the future relationship with the PIF will be crucial to maintaining its regional success.

Original Source: m.economictimes.com