Saudi Arabia’s sovereign wealth fund and PwC clashed over the Big Four firm’s plans to hire a senior executive from one of the fund’s most important projects, as relations between the two sides deteriorated last year, said people familiar with the matter.
The Public Investment Fund last month imposed a one-year ban on handing new advisory work to PwC, which has been one of the consultants on Neom, a futuristic $500bn development along the Red Sea coast that is being managed by PIF.
The decision dealt a blow to PwC’s business in Saudi Arabia, which has been among the fastest-growing in its global network, and raised broader questions about the country’s extensive use of international consultants.
PwC’s attempt to hire Neom’s chief internal audit officer, Jason Davies, caused upset inside PIF, said five people familiar with the dispute. He had been employed by Neom since 2020 and had agreed to move to PwC in the middle of last year, some of the people said.
The situation caused “friction and angst” between PIF and PwC, one of the people said. Hiring a senior executive from a client causes “a lot of aggravation” and “doesn’t look good”, said another of the people.
Davies, who previously worked at Deloitte and Tesco in the UK, left Neom in September, according to his posts on LinkedIn, but ultimately did not join PwC. He did not respond to a request for comment.
While at Neom, Davies had been the subject of a glowing profile on PwC’s website where he described building Neom’s internal audit function, which monitors financial reporting and compliance. The page has since been taken down and now redirects to a PwC homepage.
Several people familiar with the matter described the clash over Davies’ role as a factor in the deteriorating relationship between PIF and PwC that culminated in last month’s ban.
PwC will be allowed to continue its consulting projects that are already under way for PIF, and its audit work in Saudi Arabia will not be affected, but it will not be allowed to bid on further work for the fund.
PwC and PIF declined to comment.
PwC’s Middle East operations are part of PwC UK and have propped up revenue growth at a time of sluggish consulting demand in Britain.
Sales at the Middle East business grew by 26 per cent in the year to June 2024, while UK revenues increased 3 per cent. The Middle East business accounted for almost one-third of PwC’s total revenues of £6.3bn across the UK and Middle East for the 12-month period.
Over the past decade, consultants have flocked to Saudi Arabia after Crown Prince Mohammed bin Salman launched ambitious plans to develop the conservative nation and reduce its dependency on oil.
The $925bn PIF has been the main vehicle driving the changes as it has become the dominant force in the economy, spending hundreds of billions of dollars on mega-projects and the establishment of new companies.
Neom, a vast project including plans for a linear city called The Line, a ski resort, and logistics and tourism sites, is regarded as the prince’s flagship project and has provided a feast of fees for consulting firms.
But after almost a decade of frenetic spending, Riyadh has over the past year been tightening its belt and reprioritising its spending on developments, with some projects being delayed and others scaled back. Government entities and consultants also face growing pressure to deliver returns and prove their value.
