October 16, 2018 / 2:23 PM / 10 months ago

BlackRock's Fink says will not cut ties with Saudi Arabia

(Reuters) - BlackRock Inc Chief Executive Officer Larry Fink said on Tuesday that he would not cut ties with Saudi Arabia even as pressure mounts on the country to explain the disappearance of a prominent critic.

FILE PHOTO: Larry Fink, Chief Executive Officer of BlackRock, stands at the Bloomberg Global Business forum in New York, U.S., September 26, 2018. REUTERS/Shannon Stapleton/File Photo

Fink is one of several top business executives, including JPMorgan Chase & Co’s Jamie Dimon and HSBC Holdings plc CEO John Flint, who pulled out of a major investment conference in Riyadh after Saudi journalist Jamal Khashoggi, a Washington Post columnist who has been critical of the country’s policies, went missing.

Khashoggi, a U.S. resident, vanished after entering the consulate. Turkish officials say they believe he was murdered there and his body removed, which the Saudis strongly deny.

Asked on CNBC if he would cut off all business ties with Saudi Arabia if it became clear that King Salman bin Abdulaziz Al Saud or Crown Prince Mohammed bin Salman had ordered Khashoggi’s murder, Fink said, “No.”

BlackRock, the world’s largest fund manager with oversight of more than $6.4 trillion in assets, is widely followed by investors and economists for its influence at many of the world’s public companies and it also has a foothold with governments around the globe.

Fink has long had relationships with Saudi officials and one year ago announced plans to open offices within the country. Relationships with the business and investment community are essential to the country’s Vision 2030 push to diversify the economy away from oil. The plan has grabbed attention for its big-ticket initiatives, such as a $500 billion business zone and a plan, now shelved, to sell part of the state oil firm.

But the journalist’s disappearance on Oct. 2 created a complex calculus for BlackRock, whose chief executive has worked to present it as socially conscious.

In a letter to top corporate executives earlier this year, Fink wrote that to “prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”

Fink told CNBC he wanted the conference delayed until the end of an investigation into the journalist’s disappearance but that he had not been successful. At that point, he said, he had only one choice and that was to withdraw.

“We needed to be thoughtful and mindful how to navigate this,” Fink said.

“I wanted to preserve the relationships that we’d worked so long for.”

Reporting by Trevor Hunnicutt; Additional reporting by Diptendu Lahiri in Bengaluru; Editing by Saumyadeb Chakrabarty and Nick Zieminski

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