Tamweel deputy head arrested

Police detain the deputy head of the country's largest Islamic lender as an investigation into corruption widens.

Tamweel shares have taken a battering since their peak in June.

DUBAI // Authorities in Dubai have detained Abdullah Nasser Abdullah, the deputy group chief executive of Tamweel, as part of a widening corruption and financial misappropriation inquiry. Abdullah is the latest suspect to be held in the ongoing investigations into alleged fraud in Dubai's property and financial markets. Adel al Shirawi, the vice chairman of Istithmar World and former chief executive of Tamweel, and Feras Kalthoum, the chief financial officer of Istithmar World and former head of finance in Tamweel, are also both in police custody. Tamweel is the country's largest Islamic mortgage lender by market value. In a statement to the Emirates Commodities and Securities Authority (Esca) - the regulator of Dubai Financial Market (DFM), where Tamweel shares are traded - Sheikh Khaled bin Zayed, the chairman of Tamweel, confirmed that Abdullah was "detained for questioning" by the authorities in Dubai, but declined to comment on the investigation. "Tamweel cannot provide specific comment on this ongoing investigation, so as not to jeopardise it," he said. "The company wishes to restate its full confidence in the judicial system in Dubai and the UAE. As and when required, Tamweel will provide its full and complete co-operation to the government authorities conducting this investigation." Earlier, a senior company official said that the firm was not fully aware of the charges against Abdullah, who is also the chief executive of Tamweel Properties & Investments, a fully owned subsidiary of Tamweel that focuses on property investment and brokerage services. He added Abdullah was held by police yesterday. Sheikh Khaled said Tamweel would continue to act in the best interest of the country and all its stakeholders, including its shareholders and sukuk holders. Investors offloaded their holdings of Tamwheel, pushing its share prices down 4.05 per cent. Tamweel shares opened at Dh5.42 (US$1.5) and closed the day at Dh5.20. The DFM General Index closed slightly higher at 0.18 per cent. Tamweel shares have taken a battering since peaking in early June, and have fallen almost 40 per cent since. The shares are down 24.52 per cent since the beginning of this year. "People are fed up with surprises. Three arrests in the Tamweel case in less than a month are not helping investor sentiment," said Aymen el Saheb, the head of operations at Drahem Financial Brokerage in Dubai. Mr Saheb said long-term share holders had lost enough money in Tamweel and were offloading their positions to look for other options. "Tamweel stocks will have to face some rough days ahead. I would not be surprised if it heads for new lows," he added. Dubai government-owned Istithmar World has a 22 per cent stake in Tamweel, while Dubai Islamic Bank (DIB) owns 19.98 per cent of the firm. Some DIB senior executives are already under investigation on charges of bribery and financial corruption. The investigations into Dubai's corporate houses has steadily widened since April this year, and have been closely watched as they ensnared current and former executives from several major companies. Dubai's public prosecutor last month said: "fighting corruption is at the top of the [Dubai] Government's priorities". The unusual public statement, released through the media office of Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, was the first formal acknowledgement that Dubai authorities are conducting a co-ordinated series of investigations aimed at alleged white-collar financial improprieties. The clean-up started with the arrest of Zack Shahin, the former chief executive of DIB's property development affiliate, Deyaar. Shahin has been in jail since early April. He has maintained his innocence. DIB was the second listed corporation to come under the microscope when it confirmed in June that one of its former vice presidents was being investigated on fraud and bribery charges. Tamweel was the third listed entity to shake the market when the firm confirmed that Mr Shirawi was the subject of a police investigation on similar charges. Nakheel, the government-controlled property developer, has also admitted that one former and one current executive have been questioned in the investigations. Sama Dubai, a part of government-owned Dubai Holding, has also come under the microscope, and four of its executives have been detained including Abdulsalam al Marri, the chief executive of the firm's Lagoons Project. Companies have all issued statements declaring that their businesses are not under investigation and their bottom lines will be unaffected. However, investors and observers remain worried and sceptical about the claims made by the companies until the authorities reveal the findings and exact extent of the damage done. "The firms will have to reveal more details to investors and shareholders," said Mr Saheb, adding the investigations and lack of information were not helping the market or investor sentiment. [e-mail]