Saad Abdul Razak, who has been in detention since October, has been dismissed from Tamweel's board of directors, the Islamic lender said yesterday. Mr Abdul Razak, who is also a former chief executive of Dubai Islamic Bank and managing director of the Investment Corporation of Dubai, was arrested in connection with an inquiry into alleged corruption. He is still in police custody, although no charges have been brought against him.
The decision was taken at the company's board meeting on Jan 6, and formally announced to the Dubai Financial Market in a statement yesterday. Tamweel declined to comment further. A spokesman referred questions on the state of the merger of Tamweel with Amlak, the nation's largest home lender, to the Ministry of Finance, which is overseeing the process. Mohammed Gargash, who is in charge of disclosure at the Dubai Financial Market, said Tamweel might be permitted to file such decisions late.
In November, the Government announced its intention to roll the two home-financing entities into two federally funded banks, Real Estate Bank and Emirates Industrial Bank. The four entities would be called Emirates Development Bank, and be the largest mortgage provider in the country. Robert Thursfield, the director of financial institutions at Fitch, the ratings agency, said the Ministry of Finance had assumed control of the merger process. "The Ministry of Finance is working out what to do, and Amlak and Tamweel will be told."
The Government has yet to make public its detailed plans for the merger, including the question of whether the companies would remain two entities or be fully merged. Amlak said it would hold its own board meeting on Saturday, where it would discuss "the financial statement ... staff redundancies, merger proceedings and real estate investments evaluation". A government body is evaluating the assets held by the two firms. By the end of next month it will give its final assessment of the two lenders' share prices and the framework to decide shareholders' rights. Last month the al-Ittihad newspaper quoted Younis al Khouri, a senior official at the Ministry of Finance, as saying that the merger would be decided by the two companies' shareholders at general meetings.
It is unclear whether Mr Abdul Razak continues to hold any of his other board positions. Mr Abdul Razak was one of several high-profile Dubai businessmen to be held in an investigation into alleged fraud in Dubai's property and financial markets. Several members of Tamweel's management were also arrested, including Adel al Shirawi, the former chief executive, the company's deputy chief executive, Abdullah Nasser Abdullah, and Feras Kalthoum, the former head of finance. None of those detained has been formally charged.