Dubai has created a task force to investigate the multibillion-dirham corruption scandal in the emirate's financial institutions, and more arrests could be made, a senior police officer said yesterday.
"We are the first country in the Gulf and the Middle East to have carried out these types of operations," said Major Gen Khamis Mattar al Mazina, deputy commander-in-chief of Dubai Police.
Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, ordered the Dubai Public Prosecution office to establish a specialist unit to investigate fraud in several government-backed companies, Major Gen Mazina said. He would not reveal how many police officers were assigned to the team.
The investigations are being run by Dubai Public Prosecution to keep any pending arrests secret, he said.
"We only carry out the arrests after we get the orders from the Public Prosecution. They investigate."
The task force has ample resources to deter, investigate and arrest company chiefs found to have a hand in financial irregularities, a spokesman for Public Prosecution said.
Major Gen Mazina said money laundering, embezzlement and other forms of fraud happened in all Middle Eastern countries, but Dubai was the first to combat it because of the "vision of Sheikh Mohammed".
The Public Prosecution said the team would be disbanded when the corruption investigations were completed, but did not say how long they would take.
The financial sector is also facing more scrutiny following the appointment last week of a Dutch regulator, Paul Koster, as chief executive of the Dubai Financial Services Authority.
Mr Koster, who has experience fighting fraud, had been commissioner and executive board member at the Netherlands Authority for the Financial Markets since 2001.
Seven senior executives have been detained since Zack Shahin, the former chief executive of the property developer Deyaar, was jailed over allegations of "financial mishandling" in March.
Abdullah Nasser Abdullah, Tamweel's deputy chief executive, was detained by Dubai Police this month after a six-month investigation into fraud in the company's property and finance sectors.
No criminal charges were filed, but some of those arrested had their passports confiscated and were ordered to remain in the country until investigations were completed.
Last week, Istithmar World suspended two executives, Adel al Shirawi, the vice chairman, and Feras Kalthoum, the chief financial officer. The company said the suspensions were in connection with investigations into the men's activities while working for another company.
Mr Shirawi was also suspended from the board of Istithmar.
Many of the companies implicated in the inquiry have crossed shareholdings. Istithmar World, which has a private equity and alternative investments division along with departments dedicated to ventures in aviation and start-ups, is the largest shareholder in Tamweel, with a 22 per cent stake.
Dubai Islamic Bank, two former senior executives of which were arrested in the inquiry, owns a 20 per cent stake in Tamweel and is the largest shareholder in Deyaar.
Tamweel said this month that it was co-operating with the inquiry.
Sama Dubai, a property concern with four executives detained in the investigation, is part of Dubai Holding, a private company owned by Sheikh Mohammed.
Dubai Islamic Bank last week seized the land assets of Plantation Holdings, a development company with a plot intended for a polo resort in the proposed US$40 billion (Dh147bn) Dubailand zone.
The owner of Plantation, Arthur Fitzwilliam, has also been arrested. The bank said the seizure was to recover debt in default. Plantation said the action was illegal.
Deyaar has entered talks with its parent company to take over the Plantation project, the value of which has been estimated at Dh2.5bn, company officials said recently.
Nakheel, the state-controlled developer of the Palm Islands, has confirmed that one present and one former employee have been questioned as part of a fraud investigation.
shafez@thenational.ae
How to improve Arabic reading in early years
One 45-minute class per week in Standard Arabic is not sufficient
The goal should be for grade 1 and 2 students to become fluent readers
Subjects like technology, social studies, science can be taught in later grades
Grade 1 curricula should include oral instruction in Standard Arabic
First graders must regularly practice individual letters and combinations
Time should be slotted in class to read longer passages in early grades
Improve the appearance of textbooks
Revision of curriculum should be undertaken as per research findings
Conjugations of most common verb forms should be taught
Systematic learning of Standard Arabic grammar
Breast cancer in men: the facts
1) Breast cancer is men is rare but can develop rapidly. It usually occurs in those over the ages of 60, but can occasionally affect younger men.
2) Symptoms can include a lump, discharge, swollen glands or a rash.
3) People with a history of cancer in the family can be more susceptible.
4) Treatments include surgery and chemotherapy but early diagnosis is the key.
5) Anyone concerned is urged to contact their doctor
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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