Dubai: A former top official at Drake & Scull International was arrested by Jordanian authorities following an Interpol alert sounded by the UAE. Khaldoun Al Tabari - founder and former CEO of DSI - was detained while at the Queen Alia International Airport in Amman, according to informed sources.
Al Tabari was supposed to appear before Abu Dhabi’s Public Funds Prosecution over criminal charges filed by DSI for fund mismanagement/misappropriation. But he never turned up for the hearing, and a travel ban was subsequently imposed by UAE authorities.
The arrest by Jordan thus sends a strong message that misdemeanours done by corporate chiefs and senior personnel in the UAE will not go unpursued.
It was in November that Drake & Scull International confirmed it had filed “15 criminal complaints against the previous management, members of the previous board of directors and some of their family members.”
Competent judicial authorities in Jordan will continue to consider the charges against Al Tabari, which include several accusations of financial crimes committed during his previous duties as executive director, member and deputy chairman of the Board Executive management at DSI.
These complaints are “still under investigation by the relevant authorities,” DSI said at the time. (Apart from the one on Khaldoun Al Tabari, a travel ban was also imposed on his daughter, Zeina Tabari.) After the Jordan detention, Al Tabari was released, but his passport was seized. Al Tabari is a Jordanian national.
Al Tabari could not not be reached for comment by Gulf News.
Shocker of a result
The legacy problems at DSI were revealed last year when the current management said accumulated losses had crossed more than Dh4 billion, and that the scale and nature of these losses were kept in the dark by the previous management. This was what prompted the filing of charges with the Public Funds Prosecution.
The UAE authorities had issued a directive to freeze the bank accounts of the official and his wife as well as to seize properties registered under their names.
“Competent judicial authorities in Jordan will continue to consider the charges against Al Tabari, which include several accusations of financial crimes committed during his previous duties as executive director, member and deputy chairman of the Board Executive management at DSI,” said a source close to the current DSI management.
It is not known whether the current DSI management has filed for compensation against the earlier administration, and if so, what the size of the claims are.
Boost for turnaround chances
But one thing is clear - the Al Tabari detention sends out a strong notice that corporate sins of the past will not be forgotten. According to a legal source, “It would have been easy for the current DSI management to have taken a lenient view of past management actions - it has happened at other companies.
“But when the very future of the company is at stake, DSI management has the moral authority to do whatever is possible. It owes it the shareholders of what was once a highly profitable company.” (The DSI shares on DFM (Dubai Financial Market) has been suspended for some time now after the company missed deadlines on announcing its earnings.) In the November statement, Shafiq Ahmed Saleh Abdelhamid, Chairman of the Board of Directors at DSI, said: “It is our duty to protect the rights of our shareholders who trusted us and invested in this company. We will pursue everyone who was involved and is proven guilty of jeopardising in any manner the best interests of our shareholders and undermining their trust in the company.
“The investigation is still ongoing to uncover any other offences committed by the previous management. We are all endeavoring to provide the evidence to the relevant authorities to ensure a verdict that fairly protects the rights of all shareholders, including governmental institutions such as the Social Security Fund, Dar Zayed for Family Care and the Social Care & Minor Affairs Foundation.”
Talks with banks
According to sources, DSI is still engaged in consultations with lender banks to come up with a lasting solution to its cash problems and help it manage its dues. An outcome on this could be imminent. (On the projects’ side, DSI is engaged in a high-profile mall development in Abu Dhabi.)
The grounding of a high-flying company
Drake & Scull International was one of the standout performers in the UAE’s construction sector, with its involvement in a series of high-profile projects. But then the company began to over stretch itself through setting up overseas subsidiaries in other Gulf markets and elsewhere in the region.
Some of these entities only existed on paper, and was often used as a front to channel funds overseas by some of the previous management.