Dubai’s Drake & Scull appoints new chairman amid financial woes

Contractor said in May it is under investigation by the UAE markets regulator

Drake & Scull International has appointed its second chairman in seven months, as an investigation and financial restructuring continues. Rich-Joseph Facun / The National

Drake & Scull International, the Dubai-based contractor under investigation by the UAE regulator amid financial restructuring, said it appointed a new chairman and board member following resignations by some of the company's top brass last month.

The board of DSI appointed Shafiq Abdelhamid as chairman - its second in less than seven months - and Abdallah Al Matrooshi as a member of the audit committee, the company said on Monday in a filing to the Dubai Financial Market, where its shares trade.

Former chairman Obaid Bin Touq, who was appointed to the post in December, and board member Khamid Buamim resigned from the company in May, DSI said in a statement at the time, adding that new appointments will be made “soon”.

Mr Abdelhamid will be granted “the necessary powers to represent the company in accordance with the UAE Companies Law”, DSI said on Monday.

Shortly before Mr Bin Touq’s resignation, DSI confirmed it was under investigation by the UAE markets regulator Emirates Securities & Commodities Authority, which has set up an audit committee to examine the contractor’s financial statements after years of losses.

DSI fell on hard times during the three-year oil price slump that began in 2014 and heavily impacted the property and construction sector in its core UAE market.

In July 2018, an internal investigation by the company into alleged misconduct by previous management claimed that former DSI chief executive Khaldoun Al Tabari and his daughter, Zeina Tabari, owe the company as much as $272.3 million (999.3m), exceeding the market capitalisation of the firm. DSI shares fell as much as 70 per cent before trading was suspended in November.

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Mr Al Tabari refuted the allegations in a statement immediately after they surfaced and said: “I categorically deny that any claims have been made against me .... 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 said in May it was cooperating with the ESCA and had began handing over documents related to the investigation. The firm had earlier this year commenced a restructuring plan after appointing financial and legal advisers 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,” the contractor said in the bourse filing in May.