UK construction executive sues Saudi-owned developer for $100mn

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The former chief of Saudi Arabia’s largest property developer is suing the state-owned group chaired by the kingdom’s crown prince for more than $100mn in unpaid bonuses and other compensation.

David Grover, who during a 30-year career at UK’s Mace was involved in projects including the Shard in London, has brought the lawsuit in Riyadh claiming Roshn — a real estate group backed by Saudi Arabia’s Public Investment Fund — terminated his employment unfairly at a time when he was due large bonuses and growing performance payments.

Grover was fired as chief executive by Roshn in April, but the reasons for his dismissal were not disclosed, while the subsequent lawsuit brought by the executive has not been reported before.

Roshn has claimed in defence of the lawsuit that the executive was dismissed for an alleged conflict of interest after he rented properties he owned in France to the company, according to people familiar with the situation.

The lawsuit against Roshn comes at a time when Crown Prince Mohammed bin Salman, the de facto ruler of the kingdom, has tried to woo top western executives to help deliver his goal of rapidly growing the non-oil economy.

Grover was headhunted by the PIF four years ago to spearhead the construction arm of the “Vision 2030” project, through which Prince Mohammed is seeking to modernise the kingdom’s broader society.

Prince Mohammed has set the company a steep target of building 400,000 new homes, targeting home ownership among Saudi nationals to 70 per cent by the end of this decade.

During Grover’s time as chief executive, Roshn built entertainment districts, hospitals, schools and mosques alongside homes, becoming the kingdom’s largest property developer.

According to people familiar with the situation, Grover is claiming unpaid bonuses related to hitting performance targets between the start of his employment in 2020 and his termination in April.

He is also seeking payment and bonuses related to a rolling three-year contract that was due to extend until 2029. In total the claims are in excess of $100mn.

According to the same people, Roshn has claimed Grover was dismissed after renting two apartments he owned in the south of France to executives from the company when they were attending a leading real estate conference in Cannes.

The MIPIM conference is one of the world’s largest and frequently results in a scramble for accommodation. Grover and his team were asked to attend at the last minute by the Saudi government.

People close to Grover say he fully disclosed his ownership of the properties to the company’s human resource department, who supported the plan as part of a cost-saving drive, and that they were rented on an arms-length basis through an agency. Roshn continued using the apartments after he was first suspended in March.

The company has disputed in court that Grover fully declared his ownership of the French properties and has alleged in its defence that he took steps to hide his interest, something the UK executive denies.

The people close to Grover suggest he believes the apartment issue was used to dismiss him at a time when he and the company had hit performance targets triggering large potential bonuses in his contract.

Grover had also started a push within the company to improve transparency, having raised concerns over Roshn’s contracting processes.

Roshn and PIF did not respond to multiple requests for comment from the Financial Times. Grover declined to comment.

Winning legal cases in Saudi Arabia has traditionally been viewed as challenging for non-Saudis, one factor western executives have cited for reluctance to take up roles in the kingdom.

The crown prince has introduced judicial reforms aimed at improving the business environment in recent years, a factor that is likely to increase interest in the outcome of Grover’s lawsuit.

Executives that worked with Grover said he was a full-throated backer of Prince Mohammed’s goals and Vision 2030, and that he turned Roshn from a start-up into a company that grew rapidly with an effective joint western-Saudi culture.

Saudi Arabia has turned to western executives and consultants to run some of its most prominent new projects and companies, many of them subsidiaries of the PIF.

Saudi government ministers and senior foreign executives have spoken about how the crown prince is closely involved in decision making in his capacity as chair of many PIF companies.

The foreign chief executive of King Abdullah Financial District, another PIF project, was replaced last month.

Grover lost the first stage of the case in October but an appeal is due to be heard in a higher court in Riyadh later this month. If the suit is lost again it can be elevated to Saudi Arabia’s Supreme Court.