(Bloomberg) -- A US Senate panel investigating the merger of the PGA Tour and the Saudi Arabia-backed LIV Golf issued a rebuke to the oil-rich kingdom’s wealth fund for obstructing its inquiry.
“What is unprecedented here is the PIF’s repeated attempts to hamper this Subcommittee’s inquiry,” Democratic Senator Richard Blumenthal, chairman of the Permanent Subcommittee on Investigations, and the panel’s top Republican, Ron Johnson of Wisconsin, wrote in a letter to the Saudi wealth fund’s governor, Yasir Al-Rumayyan.
The Senators said the Public Investment Fund filed lawsuits against some of its own advisers, including McKinsey & Co. and M. Klein & Co., to prevent them from submitting evidence. Consulting firms Teneo Strategy and Boston Consulting Group were also subject to lawsuits from the PIF, as the wealth fund is known.
The PIF filed lawsuits against the advisers on Nov. 30. The panel said this was “concerning” and an attempt to “prevent the production of records to this Subcommittee.”
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A spokesman for the PIF didn’t respond to requests for comments. Messages to M. Klein, McKinsey, Boston Consulting Group and Teneo also went unanswered.
The LIV tour has upended men’s golf since its launch in 2022. It’s convinced some of the world’s best players to join — including Americans Phil Mickelson and Dustin Johnson — by offering them huge pay deals.
Al-Rumayyan is a big golf fan.
The Senate panel had been seeking information on work done for the PIF, particularly related to investments in the US and the establishment of LIV Golf.
They requested the information from PIF’s advisers by Sept 6. after Al-Rumayyan had declined an invitation to testify before the Subcommittee. The Senate’s request would require the PIF’s advisors to violate Saudi law, PIF’s lawyers said in a letter to the Senate dated Jan. 12., after the fund filed lawsuits in Saudi courts to block them from providing the information requested.
The fund’s US subsidiary was also subpoenaed on Sept. 13 to compel it to produce documents related to the inquiry.
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The $700 billion Saudi wealth fund was the most active fund in the world last year, and has a $36 billion portfolio of US stock investments. It owns stakes in Lucid Group Inc., Activision Blizzard and JPMorgan Chase & Co.
It has become a key vehicle for Crown Prince Mohammed bin Salman, who is also chairman of the fund, to transform Saudi Arabia. He wants to reduce its dependency on oil and turn it into a hub for everything from electric vehicles to semiconductors and tourism.
The PGA and LIV’s shock announcement last year that they were working on a merger put an end to a bitter legal battle in US courts over allegations of antitrust violations.
Still, those talks have not yet resulted in a deal. And while the negotiations continue, LIV has continued to entice players away from the PGA. In December, the world number three player, Spain’s Jon Rahm, joined LIV. He could earn as much as $300 million with the switch, according to a report from ESPN.
PGA Tour Inks $3 Billion Deal With Fenway, Steve Cohen Group
On Wednesday, another investor, Strategic Sports Group, agreed to put $3 billion into the PGA, in a deal valuing the owner of the US’s main golf tour at $12 billion.
Strategic Sports is led by John Henry’s Fenway Sports Group, which owns the Boston Red Sox and Liverpool FC.
--With assistance from Christine Burke.
(Updates with latest on PGA investment by Strategic Sports Group and context on LIV.)
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2024-02-01T08:16:28Z dg43tfdfdgfd