Officials call for complete enforcement of laws

Abu Dhabi: The full implementation of the corporate governance codes issued by the Securities and Commodities Authority (SCA) last year will ensure better transparency and less corruption, senior officials said on Monday.

"The full implementation of the corporate governance codes will help eliminate corruption cases, although there is no such thing as a corruption-proof country, it happens in the US, Europe, and Asia," Abdullah Al Turaifi, CEO of SCA told Gulf News.

"Achieving full implementation is a process that extends for three years, and at this stage, we are still making progress so that full application takes the final shape by the end of 2009," he said, explaining that the process involves drastic managerial and administrative changes on behalf of the companies.

"There are new departments that must be established, new employees, and new systems that are required by the new laws, and this will take some time," he added.

The higher degree of transparency will positively influence the stock markets in the longer term, while in the short term; the specific stocks in concern can suffer from losses.

"In a longer term, such transparency is evidence for better corporate governance; a determining factor for foreign investors, especially institutions, looking to invest in our markets," commented Khalid Abdul Rahman, general manager of Abu Dhabi Financial Services.

"Today, transparency and corporate governance indices include the least yielding assets, owing to the lower risks associated with such investment, and exposing these cases in Dubai will boost investor confidence," he added.

Abu Dhabi has a less attractive transparency record. In 2006, an incident between Sorouh Real Estate and PriceWaterHouse-Coopers in 2006, its auditing firm at the time, was poorly disclosed and ended leaving public shareholders with insufficient explanations.

"We badly need the implementation of the new laws, as these will help curb corporate corruption," said Ahmad Ali Al Hosani, director of the companies department at the Ministry of Economy.

"Better governance will only yield less misbehaviour," he added.