Drake & Scull chairman and board member resign amid investigation

Regulator is examining financial statements, DSI said

DSI said on Tuesday its chairman and another board member resigned, as the company undergoes an investigation by the UAE regulator. Rich-Joseph Facun / The National

Drake & Scull International said its chairman and another board member resigned, as the UAE’s financial regulator investigates the ailing Dubai contractor’s finances after years of losses.

Chairman Obaid Bin Touq – who was appointed to the post in December – and board member Khamid Buamim resigned from the company, according to a filing to the Dubai Financial Market, where its shares were traded.

DSI thanked the chairman and board member “for their efforts during the tenure of their membership of the board” in the statement. The board of directors will elect new members soon, it added.

The contractor has fallen on hard times amid a softer property and construction sector in its core UAE market because of a three-year oil price slump that began in 2014. In July 2018, an internal investigation by the company into alleged misconduct by previous management found that former DSI chief executive Khaldoun Al Tabari and his daughter, Zeina Tabari, owe the company as much as $272.3 million, exceeding the market capitalisation of the company.

Shares fell as much as 70 per cent before trading was suspended in November.

In a media statement at the time the allegations were made, Mr Al Tabari said: “I categorically deny that any claims have been made against me. No such claims have been made, nor am I aware of the nature of any alleged 'violations'.”

The former chief executive stepped down from his role at DSI in October 2016, sold his stake in the company and resigned as a board member.

DSI posted a net loss of Dh4.5 billion for 2018, widening from Dh1.18bn in 2017, and has seen a string of senior management exits over the past 12 months. The latest was that of its chief executive Tawfiq Abu Soud, who was appointed to the post in January but was fired last month, along with chief financial officer Khaled Jarrar and chief legal officer Mohamed Ghanem.

This week, the company confirmed it was under investigation by the Emirates Securities & Commodities Authority, which has set up an audit committee to examine DSI’s financial statements.

In a bourse filing on Monday, DSI thanked the ESCA for its efforts and support of a restructuring plan that the contractor began this year, after appointing financial and legal advisors last November.

“A committee with banks has been formed to look into the company’s obligations and find solutions that support the continuity of operations and portfolio of investments,” it said.