Arabtec moved to quell investor fears yesterday with a pledge to focus on its core business and a commitment to press ahead with its current projects.

The chairman Khadem Al Qubaisi faced an hour-long grilling from reporters at a hastily convened press conference in Abu Dhabi.

After having reduced its shareholding from 22 per cent in the company two weeks ago, prompting fears that the government- backed fund was loosening its ties with Arabtec, he said that Aabar intended to have a "stronger relationship than before" with Arabtec and was considering increasing its current 19 per cent stake.

However, the company conceded that following the dramatic departure of the former chief executive Hasan Ismaik two weeks ago, it would cut back on its ambitious plans to diversify into oil and gas construction and to acquire other construction rivals.

“There is no change with the projects. Everything is going according to plan,” said Mr Al Qubaisi. “The point I am sending here is that Aabar and Arabtec, we are in a good alliance here and we will continue to improve this alliance. Maybe there is the possibility for Aabar to increase its stake in Arabtec in the near future.

“We terminated a few contracts but there is no change. The projects will continue and we will replace people with construction professionals,” he added. “I’m not saying we will forget the other projects, like the real estate. We will do it. The oil and gas we will do through our alliances. Construction is the backbone of this company. Don’t expect me to hire a lot of people from investment banks, paying them five or six times the salaries of the construction people. I will not do it.”

Arabtec shares plunged 39 per cent in the aftermath of Mr Ismaik’s sudden departure and news of mass sackings of senior executives, falling from Dh4.3 onJune 18 to just Dh2.61 on Monday.

Mr Al Qubaisi denied that the recent fall in Arabtec's share price was responsible for the slump in UAE markets, which has especially affected the Dubai Financial Market. "This is not only Arabtec. The whole stock market came down and there are a lot of political things happening in the Middle East and other things. I disagree with you that Arabtec is behind this crash in the Middle East and the stock market in Dubai and Abu Dhabi," he said.

He explained that investor decisions were not based on the leadership issues. “You are buying the company because fundamentally speaking, you did your exercise. You reviewed the company and you studied the company and according to that you put to yourself a target price and you bought it. But to say because the CEO resigned the company crashed is wrong. I don’t think Arabtec is behind the whole thing,” he added.

Shortly before he left the company it was revealed that Mr Ismaik had amassed a 28.8 per cent stake. That has been the focus of much speculation.

Mr Al Qubaisi told reporters that he understood Mr Ismaik had built up his ownership of Arabtec stock to 28 per cent months before the disclosure to the market, by building up his stake under different company names.

He said: " What I understood is that he bought the shares under different names or under different people. To be frank with you, SCA decided to gather all the shares because they are linked to Mr Hasan and they put the whole shares under one link, which is Mr Ismaik."

Arabtec declined to say how many senior managers had lost their jobs in the recent restructuring, but said that the change of personnel was “healthy for the company”.

“We don’t need M&A people,” said Mr Al Qubaisi. “We are reviewing now a lot of things. Yes there were some people who were over-paid. We discovered that there was too much. We decided that we need to reduce the costs to save more money because there are a lot [of companies] in the market who can do the same thing with less money. At the end of the day we need to focus on construction. Any fat in the entity I will take it out.”

Arabtec shares had risen steadily through the first half of 2014 as Mr Ismaik followed an aggressive expansionist policy, backed by the company's major shareholder Abu Dhabi government fund Aabar, which had attempted to transform the company into a top 10 global contractor.

Arabtec been pursuing a policy to diversify its operations away from the cyclical UAE housing market and announced ambitious plans to move into the lucrative oil and gas industry.

Last year the contractor raised Dh2.4 billion in a rights issue to fund aggressive growth driven by the acquisition of stakes in other large builders.

fkane@thenational.ae