How Fink Is Handling the Missing Saudi Journalist Scandal
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Tuesday, October 16, 2018

How Fink Is Handling the Missing Saudi Journalist Scandal

When you're the biggest asset manager in the world, it's easy to get sucked into the news cycle on things outside the asset management world. Larry Fink says he had "only one choice" when reacting to the scandal around the disappearance of a Saudi journalist, but that doesn't mean he's drawing a line in the sand.

While the world awaits word on the fate of Washington Post columnist and U.S. resident Jamal Khashoggi, Fink is one of several high profile CEOs who has backed out of a big investment conference next week in Saudi Arabia after unsuccessfully pushing for a postponement, as reported yesterday by CNBCDealbreaker, the Financial Times, Reuters, and the Wall Street Journal. (The CEOs of Blackstone, Ford, and J.P. Morgan also backed out, as did several news outlets.) Yet this morning Fink, CEO of BlackRock, tells CNBC that, even if Turkey is right and the Saudi government ordered the murder of Khashoggi, BlackRock won't cut ties with Saudi Arabia. (Here's the transcript of that interview.)

"We do business in 80 different countries," Fink says. "There are many countries where we may disagree."

"I have been a lifelong globalist," Fink adds. "I'm still proud to be a globalist in this day and age."

Yet the BlackRock team also has "to be mindful of this investigation," which Fink describes as "a big issue with BlackRock's employees [and] a big issue with many of [BlackRock's] clients." Hence, he says, he had "only one choice": to back out of the event next week.

Other asset managers have not yet been put in the spotlight over the Khashoggi disappearance scandal. Yet Mohamed El-Erian, chief economic adviser at Allianz, told CNBC yesterday that he would have backed out of the Saudi conference, too, except he had already declined due to a scheduling conflict. (El-Erian also observed that Mister Market doesn't seem to care much about American CEOs backing out of the event as there was "only a small move" in oil prices yesterday.

Meanwhile, the widespread rumor this morning is that the Saudi government is weighing blaming Khashoggi's death was accidental, and U.S. President Trump seems to have offered the kingdom an out by saying publicly that perhaps Khashoggi was murdered by "rogue killers" not acting under orders.

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