After the prince announced a severing of ties due to what he argued were flawed valuation methods, Forbes has now responded with an in-depth investigation, hitting back by describing his estimates as an "alternate reality".
Forbes went on to say that the valuation of Kingdom Holding, the publicly traded company of Prince Alwaleed, gyrated for reasons "that, coincidentally, seem more tied to the Forbes billionaires list than fundamentals".
In the lengthy piece published on Wednesday, the magazine also details its relationship with Prince Alwaleed since it began in 1988, recounting what it classified as "intermittent lobbying, cajoling and threatening" to influence his net worth listing over the years.
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In one letter to Forbes shortly before publishing its billionaires list, Shadi Sanbar, Kingdom Holding's CFO, reportedly wrote that an undervaluation "strikes in the face of improving Saudi-American bilateral relations and co-operation. Forbes is putting down the Kingdom of Saudi Arabia and that is a slap in the face of modernity and progress".
According to Forbes, the Saudi prince, who it says "systematically exaggerates" his wealth, has a net worth of $20 billion, a 10 percent increase over last year. It is still not enough for a place in the top 20, ranking 26th in the latest billionaire list released on Monday, behind Google founders Larry Page and Sergey Brin.
Prince Alwaleed had added that the Forbes methodology "seemed designed to disadvantage Middle Eastern investors and institutions" and that equity valuations had been accepted in other emerging markets. His calculations show a net worth of $29.6 billion, which in theory would be sufficient for a top ten spot just behind French heiress Liliane Bettencourt.
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What's interesting to point out is that the valuation gap between the two feuding sides is mostly a result of the prince's 95 percent stake in Kingdom Holding, which is listed on the Saudi Stock Exchange. The company is home to his investments around the world, ranging from Citigroup to News Corp, from the Four Seasons Hotel to Twitter.
The office of Prince Alwaleed was quick to fire back, accusing the magazine of "completely unsupported and biased allegation based on rumors that stock manipulation 'is the national sport' in Saudi Arabia".
Sanbar added that "after several years of our efforts to correct mistakes falling on deaf ears, we have decided that Forbes has no intention of improving the accuracy of their valuation of our holdings and we have made the decision to move on".
A spokeswoman for Kingdom Holdings told CNBC that Prince Alwaleed "would like to stress the dispute with Forbes is one over the fairness and objectivity of the valuation process."
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Meanwhile,Kingdom Holding"'s CFO Sanbar argued that they had originally been in agreement over weaknesses in the valuation approach: "Mr. Forbes has acknowledged our concerns with the Forbes process, most recently in a letter to me dated February 25, 2013 in which he pledged Forbes would strive for accuracy. We were obviously disappointed with the result."
The stock of Kingdom Holding Company (KHC) has gained 86.5 percent over the past year. Talks over allowing foreign investors to buy Saudi stocks directly, rather than through equity swaps as introduced in 2008, have dragged on for years with little progress.
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