Deyaar's silence worries investors

Dubai: Deyaar Development, which announced the resignation and arrest of its former chief executive following a probe into a suspected financial irregularity, has yet to clarify the exact nature of the case and the ongoing investigations.

Answering a Gulf News query on why the company was late in informing the Dubai Financial Market, the market watchdog Emirates Securities and Commodities Authority and the shareholders on the critical developments, a company spokesperson said: "In line with the current investigations, Deyaar was constrained not to disclose any information that might jeopardise this investigation. This was done in the best interest of the investigation and of the shareholders of the company."

Many investors and market intermediaries on DFM said that the lack of clarity in the information supplied by the company is adding to the confusion. "There are a number of rumours floating in the market on the likely losses and the involvement of senior management in the case," said a DFM broker.

Deyaar's chairman Nasser Bin Hassan Al Shaikh said in a statement to the DFM last Thursday that an investigation is being conducted for certain measures taken by its former CEO Zack Shahin.

"As a publicly listed company, Deyaar should have informed its investors, the stock market and the market regulator about the investigations. Even today, we have no information about what has been investigated except the assurance by the company's new chairman that these events are not expected to have any impact on the profitability of the company," said Abdullah Hamoudi, an investor.

A DFM official said on Sunday that both Deyaar and the public prosecution are investigating the matter and so far there is no evidence that investors are going to be affected.

Deyaar on Sundayrestructured its board for the second time within a span of three weeks.

The company announced the appointment of two new members on its board of directors. Upon the acceptance of the resignations of Hussain Hassan Mirza Mohammad Al Sayegh and Sultan Ahmad Khalfan Al Gaith, the board announced the appointment of Abdullah Ali Al Hamli and Butti Abdulla Aljumairi as their replacements.

Quarterly results

Deyaar on Sunday announced that it recorded preliminary net profits of Dh202 million and revenues of Dh460 million in the first quarter of 2008. When the company was incorporated on July 10, 2007, it declared pre-incorporation net profits of Dh122 million.