Embezzlement. Bribery. Fraud. In most jurisdictions, these words keep directors awake at night.
However, despite being the commercial centre of the Middle East, Dubai, in common with the rest of the region, has not kept pace with international standards in terms of regulating corporate governance. This is now changing.
In April last year, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, declared that there "is no room for corruption and the corrupt" in Dubai and that closing any administrative and legal loopholes was equally as important as pursuing those who exploit them.
A year has passed since Sheikh Mohammed's battle cry and the past 12 months have signalled a gradual turning of the screws on those involved in financial and corporate impropriety, resulting in a series of high-profile court cases.
In particular, the case of Damas International, the jewellery retailer, demonstrates that Dubai's fight against corruption is more than just words. In March, the Dubai Financial Services Authority (DFSA) found Damas's founders and majority shareholders, the three Abdullah brothers, guilty of making in excess of 2,200 debit transactions from company accounts for personal use, with one of the brothers making "unauthorised transactions" exceeding US$165 million (Dh606m).
The brothers were collectively fined $3m, suspended from directorships at any Dubai International Financial Centre (DIFC) company for 10 years and ordered to repay $99.4m plus the value of approximately two tonnes of gold to Damas (worth more than $62m). They were also forced to resign their Damas directorships and disclose details of and grant security over high-value personal assets until the jewellery retailer is repaid in full.
The fine, the largest imposed by the DFSA, sent a clear message to corporate Dubai: impropriety will no longer go unpunished. Damas was also required to provide undertakings, which almost exclusively relate to international corporate governance principles, such as establishing a code of conduct and risk management strategies, appointing a compliance officer and apportioning responsibilities across its board and senior management.
The sub-text to the case was unmistakeable: that DIFC companies should ensure they consider and implement corporate governance structures, systems and controls to ensure proper management, both ethically and in the best interests of the company and its shareholders.
Dubai's perceived laissez-faire attitude regarding corporate governance stems from the historic lack of legislation with any real bite on the issue.
The anti-bribery and corruption provisions of the UAE Penal Code are not extensive and are limited to the bribing of public officials. However, the Dubai Law No 37 of 2009 on the Procedures for the Recovery of Illegally Obtained Public and Private Funds, effective from December 31 last year, created a broad prohibition relating to unlawfully acquired "public funds" (usually funds owned by or directly or indirectly connected to the Government) and "illicit monies" (funds acquired, directly or indirectly, due to an action that constitutes a punishable crime) or both.
The Law 37 imposes sentences of up to 20 years for those convicted of such offences, subject to provisions regarding the repayment or settlement of funds before sentencing or during imprisonment.
Importantly, those convicted remain liable for any outstanding sum and the punishments under Law 37 are without prejudice to any penalties enforceable under any other law.
Law 37 and the steady increase in high-profile convictions in Dubai demonstrates that the emirate is proactively seeking to establish a more robust corporate governance framework through which to minimise the occurrence of corporate impropriety.
In addition, the Federal Government of the UAE has already expressed its support for strict corporate governance requirements, by virtue of the Ministerial Resolution No (518) of 2009, Concerning Governance Rules and Corporate Discipline Standards, which became effective on April 30. The resolution focuses upon the prevention of, rather than the punishment for, ultra vires - acts attempted by a corporation that are beyond the scope of its charter - activity and attempt to introduce standardised corporate principles across the UAE.
Given that such regulation and the requirement of companies to have robust internal corporate governance controls will only increase as governance principles in the Middle East begin to align with those of international best practice, companies in the UAE should act now to: ensure that they have sufficient corporate governance procedures in place; protect their professional reputation; and ensure compliance with local law and Federal requirements going forward.
Simon Stubbs is a trainee solicitor with Trowers & Hamlins in Dubai. Daniel Page is a solicitor with Trowers & Hamlins. This article first appeared in Trowers & Hamlins's Middle East Business Law Review of Summer, 2010
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A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
THE SPECS
Jaguar F-Pace SVR
Engine: 5-litre supercharged V8
Transmission: 8-speed automatic
Power: 542bhp
Torque: 680Nm
Price: Dh465,071
THE APPRENTICE
Director: Ali Abbasi
Starring: Sebastian Stan, Maria Bakalova, Jeremy Strong
Rating: 3/5
JAPANESE GRAND PRIX INFO
Schedule (All times UAE)
First practice: Friday, 5-6.30am
Second practice: Friday, 9-10.30am
Third practice: Saturday, 7-8am
Qualifying: Saturday, 10-11am
Race: Sunday, 9am-midday
Race venue: Suzuka International Racing Course
Circuit Length: 5.807km
Number of Laps: 53
Watch live: beIN Sports HD
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Fixtures
Tuesday - 5.15pm: Team Lebanon v Alger Corsaires; 8.30pm: Abu Dhabi Storms v Pharaohs
Wednesday - 5.15pm: Pharaohs v Carthage Eagles; 8.30pm: Alger Corsaires v Abu Dhabi Storms
Thursday - 4.30pm: Team Lebanon v Pharaohs; 7.30pm: Abu Dhabi Storms v Carthage Eagles
Friday - 4.30pm: Pharaohs v Alger Corsaires; 7.30pm: Carthage Eagles v Team Lebanon
Saturday - 4.30pm: Carthage Eagles v Alger Corsaires; 7.30pm: Abu Dhabi Storms v Team Lebanon
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
ABU%20DHABI%20CARD
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Bridgerton%20season%20three%20-%20part%20one
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
Quick%20facts
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UAE%20SQUAD
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More on animal trafficking
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Engine: 80 kWh four-wheel-drive
Transmission: eight-speed automatic
Power: 402bhp
Torque: 760Nm
Price: From Dh280,000
Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
- Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
- Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
Indika
%3Cp%3E%3Cstrong%3EDeveloper%3A%3C%2Fstrong%3E%2011%20Bit%20Studios%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Odd%20Meter%3Cbr%3E%3Cstrong%3EConsole%3A%3C%2Fstrong%3E%20PlayStation%205%2C%20PC%20and%20Xbox%20series%20X%2FS%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
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.”
How it works
1) The liquid nanoclay is a mixture of water and clay that aims to convert desert land to fertile ground
2) Instead of water draining straight through the sand, it apparently helps the soil retain water
3) One application is said to last five years
4) The cost of treatment per hectare (2.4 acres) of desert varies from $7,000 to $10,000 per hectare
The%20specs
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Race card
1.45pm: Maiden Dh75,000 1,200m.
2.15pm: Maiden Dh75,000 1,200m.
2.45pm: Handicap Dh95,000 1,200m.
3.15pm: Handicap Dh120,000 1,400m.
3.45pm: Handicap Dh80,000 1,400m.
4.15pm: Handicap Dh90,000 1,800m.
4.45pm: Handicap Dh80,000 1,950m.
The National selections:
1.45pm: Galaxy Road – So Hi Speed
2.15pm: Majestic Thunder – Daltrey
2.45pm: Call To War – Taamol
3.15pm: Eqtiraan - Bochart
3.45pm: Kidd Malibu – Initial
4.15pm: Arroway – Arch Gold
4.35pm: Compliance - Muqaatil
The specs
Engine: 2.4-litre 4-cylinder
Transmission: CVT auto
Power: 181bhp
Torque: 244Nm
Price: Dh122,900
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
