Prince Alwaleed bin Talal claims the U.S. business publication was off by $9.6 billion US when it calculated his net worth at $20 billion, placing him 26th on the 2013 list of billionaires instead of in the Top 10 where he felt he belonged. This year's list, published in March, had a total of 1,426 names of people on it, whose aggregate net worth is $5.4 trillion US.
'We continue to be bemused by Prince Alwaleed's ego-driven PR stunt.' — Forbes magazine statement
Alwaleed argues in a claim reportedly filed in a high court in London that by not allotting him the ranking he feels he deserves and by suggesting in a March 2013 story that his own assessment of his net worth and that of his business, Kingdom Holding Company, is overblown, Forbes damaged his reputation.
The Guardian reported that court documents name the Forbes publisher, the magazine's editor and two Forbes journalists as defendants in the defamation suit.
The prince alleges that the U.S. publication's assessment of his company is also indicative of a general bias against Saudi firms and Middle East investors.
"We continue to be bemused by Prince Alwaleed's ego-driven PR stunt," Forbes said in a statement emailed to CBC News on Friday. "Forbes still has not been served with any lawsuit. Our story raises significant questions about his finances, and we would welcome the opportunity to uncover further relevant information during the course of any hypothetical suit."
Prince has long history with Forbes
The lawsuit is only the latest salvo in the billionaire's war of words with the magazine. In March, Forbes published an extensive article outlining the prince's long relationship with the magazine and spelled out why it felt the prince was exaggerating his net worth and why the share price of Kingdom Holding Company, which owns stakes in NewsCorp., Apple, eBay, PepsiCo, several hotels and other major companies, did not seem to reflect the company's true value.
The magazine detailed a pattern that repeated itself several years in a row whereby Kingdom Holding Company's shares would rise steeply in the weeks prior to the date Forbes used to evaluate the assets of the contenders for its billionaires list.
"Kingdom Holding shares began what seemed a miraculous rebound in early 2010, rising 57 per cent in the 10 weeks prior to the February date that Forbes used to lock in values for that year's billionaires list, as Citigroup shares fell about 20 per cent," the magazine wrote.
"In the 10 weeks before Forbes locked down its  list, Kingdom Holding shares rose 31 per cent while the Saudi index was up three per cent and the S&P 500 was up nine per cent over that same period.… It happened yet again in 2012, when Kingdom shares climbed 56 per cent during the 10 weeks prior to mid-February while the Saudi market was up just 11 per cent, and the S&P 500 was up nine per cent.
Bias allegation 'has no basis in reality'
The magazine said it found it difficult to reconcile the company's share performance with the company's "underlying assets or the fundamentals," especially as its "annual reports and financial statements in recent years failed to provide the names of the stocks or holdings the company currently owns."
The company's chief financial officer, Shadi Sanbar, defended Kingdom Holding Company's annual reports by reportedly telling the magazine, "We are not a mutual fund, and there is no requirement whatsoever that we disclose to anyone the share makeup of our portfolio."
Alwaleed himself told the Sunday Telegraph newspaper in mid-March that Forbes's suggestions that he was manipulating the markets to inflate the value of his company were "all wrong" and that he would "fight it all the way against Forbes."
Sanbar went on the U.S. cable television network CNBC to decry Forbes's methodology and to reiterate the allegations of bias against Middle East businesses. That prompted yet another response from the author of the previous article, Kerry Dolan, who according to the Guardian is named in the defamation suit.
She said the allegation of bias "has no basis in reality."
"We have dozens of billionaires on the list from throughout the Middle East, and we are not getting complaints from other Middle Eastern billionaires," Dolan wrote.
"Forbes will continue to include Prince Alwaleed on our billionaires' list as long as our research shows us that his net worth is $1 billion or more. We do not need his co-operation to come up with a net worth number for him."
Prestigious family pedigree
Alwaleed's family pedigree runs deep in the power centres of the Middle East. He is the nephew of Saudi Arabia's King Abdullah and both of his grandfathers were instrumental political figures — one was the first prime minister of Lebanon and the other the founder of Saudi Arabia.
Over the 25 years that Forbes has been publishing its billionaires list, Alwaleed has shamelessly lobbied the magazine to give him what he believes is his due, the magazine reported. Forbes alleged Alwaleed has bombarded its journalists with lavish press material touting himself, his company and his links to the rich and powerful and has invited them to tour his opulent properties, which, as the March article detailed, include a 420-room palace and a 120-acre farm and resort "complete with five artificial lakes, a small zoo, a mini-Grand Canyon [and] five homes."
"Of the 1,426 billionaires on our list, not one — not even the vainglorious Donald Trump — goes to greater measure to try to affect his or her ranking," Dolan wrote in the March article.
The Guardian cited a Forbes statement in which the magazine said it stands by its story and cast suspicion on Alwaleed's motives behind choosing Britain as the jurisdiction in which to launch his suit against the U.S. publication.
Forbes and some analysts suspect that Alwaleed might have chosen to launch his suit in Britain because the libel laws in that country put the burden of proof on the defendant. The country has long been criticized for making it too easy for individuals to allege defamation and squash free expression. "Libel tourists" have frequently chosen to re-launch suits in the U.K. that have failed in their own jurisdiction.
Under a recent amendment to Britain's libel law, Alwaleed will have to demonstrate that he suffered "substantial financial loss" as a result of the Forbes coverage.