Dubai: In a crucial meeting of its shareholders, the DFM-listed investment firm Shuaa has decided not to absolve its former auditors ‘from any liability’ for their work during 2023. The meeting also confirmed Crowe Mak as their new auditor, who will take over the role from PwC.
Shuaa is passing through a volatile period, with losses sustained during 2023 and simultaneously working on a new strategy to take the company forward.
The shareholders meeting also took another crucial decision, again related to the 2023 performance. This meant that their former board member Jassim AlSeddiqi too will not be absolved from liability for 2023. At the same time other board members will have no liabilities against their names.
AlSeddiqi was at one time the major shareholder in Shuaa and had been credited with helping the company effect a turnaround after overseeing a merger with ADFG in 2019. He had in the recent past brought down his stake in Shuaa from over 20 per cent to the single-digits. It was in August 2023 that he stepped down as managing director and wound down his stake, which also triggered subsequent departures for the CEO and other top executives.
Typically, shareholders pass instant approvals when it comes to previous year clearance from liability for their Board of Directors and of the auditor.
Shuaa had recorded losses of Dh1.15 billion for 2023, against a loss of Dh122 million a year before. It had been late reporting the financial statements and that resulted in the DFM ordering a halt to trades in the stock.
No remuneration
Today's meeting of the Shuaa general assembly also approved that directors will not be paid any remuneration for the 2023 period. All of which is far removed from how the company was faring in 2021-22. There had been a series of big-ticket investments, including in the Arabic music streaming portal Anghami and a real estate project that was to be launched on the Palm Jumeirah. (Shuaa had a partial exit from Anghami after the latter listed on Nasdaq via a SPAC deal.)
The company's strategic intent at the time was to ride on the property boom Dubai and the UAE was experiencing. There were even plans to create a Gulf-wide profile on the property side using its property arm Northacre.
But by early 2023, Shuaa started reporting losses and which then led to the changes at the top in the second-half. As of end May this year, its accumulated losses were Dh829 million (coming to 32.68 per cent of the capital).
5-year plan
The management has ‘devised a 5-year plan to revamp the business for growth and value creation via the launch of new investment funds and re-activating the investment banking platform via deal sourcing and securing new mandates’.
That apart, Shuaa ‘expects’ a lead operating structure ‘should contribute to cost efficiencies permeating the bottom-line’.
