McKinsey-owned Saudi consultancy lead reportedly arrested and beaten

07 January 2019 4 min. read
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As pressure continues to mount on the consulting world to justify its intensifying ties to the regime of Saudi Arabia, reports have emerged that the leader of a McKinsey & Company owned firm has been arrested and beaten as a critic of the monarchy. Hani Khoja has been held in detention since the autumn of 2017, just half a year after his firm, Elixir, was purchased by the global consulting giant.

In April 2017, it was confirmed that international strategy consultancy McKinsey & Company had acquired Elixir Creative Solutions, a Saudi Arabian consultancy with expertise in change management and implementation. After the purchase concluded, Elixir’s 140 employees remained based at its offices in Jeddah and the nation’s capital of Riyadh. Elixir continued to operate as a wholly-owned subsidiary of McKinsey, and its two co-founders Sami Alzuhaibi and Hani I. Khoja remained with the company to lead it as co-CEOs, as well as sitting on Elixir’s Board of Directors.

Now, though, Khoja is understood to be in state detention, having been arrested less than a year after the deal took place. Elixir is a leading consulting firm serving clients in Saudi Arabia, and has worked for more than a decade on implementing transformation programmes in Saudi Arabia with private, non-profit and public sector clients across industries – meaning that on multiple occasions it will have performed tasks directly on behalf of the Crown Prince Mohammed bin Salman. Indeed, one of the biggest pulls for McKinsey was Elixir’s work for the Saudi Ministry of Economy and Planning.Hani Khoja - Elixir

While it remains unclear as to what caused relations to sour between the Saudi regime and the co-leader of one of its keystone consulting suppliers, Khoja’s arrest is understood to have occurred during a crack-down by the autocratic government. According to the Wall Street Journal, two people familiar with the matter allege that he has been repeatedly beaten since then.

While Khoja’s arrest was initially on the grounds of supposed ‘corruption’ charges, the sources said he had been subjected to the abuse alongside women's rights activists who are also being held and tortured in captivity. As a result, a number of sources now assert that the situation is not as much about corruption as about the government's attempts to quash criticism of the Crown Prince and his much hyped modernisation programme, which critics have suggested is a PR exercise aimed at deflecting scrutiny for a number of human rights abuses in the Kingdom.

When the Wall Street Journal contacted McKinsey about the story, a spokesman told the publication that as of early 2018, the consultant was no longer a McKinsey employee. However, conflictingly, the statement added that Khoja continues to get paid under his contract, and at the same time suggested McKinsey doesn't know where he is. The company representative also told the Journal in an email, "We have sought information from the authorities. We are anxious to know more and are in regular touch with Mr. Khoja’s family."

Khoja's apparent detention, as well as other incidents in Saudi Arabia like the murder of opposition figure and journalist Jamal Khashoggi, has been heaping pressure on businesses to consider their position in the Kingdom. For now at least, though, the consulting world seems convinced that it has lent too much time and resources toward courting lucrative Saudi contracts to rock the boat now.  Despite growing international condemnation, this was reflected by the involvement of McKinsey, PwC, EY, Deloitte, the Boston Consulting Group, Bain & CompanyOliver Wyman and research company SWFI in the heavily criticised Future Investment Initiative, hosted in Saudi Arabia in October 2018.