Analysts have praised the UAE’s Securities and Commodities Authority (SCA) announcement that requires listed companies to disclose their ties and exposure to The Abraaj Group, which has been embroiled in a host of lawsuits over money misuse allegations and which recently filed for liquidation.
UAE companies uncovering their exposure to Abraaj will restore investor confidence and such a move will encourage portfolios to renew their investments there, analysts told Mubasher.
The speed by which companies disclose their ties and exposure to The Abraaj Group is “important”, noted Wadah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities & Investments (CISI), stressing that such disclosures, whether from firms operating in the UAE or The Abraaj Group itself, are necessary.
Lenders should contribute their disclosures and any proceedings as well, he said.
Meanwhile, market analyst and expert Ziad Al Qaimiry praised the successive announcements made by Dubai-listed Air Arabia regarding its exposure to Abraaj.
He noted that some analysts had expected the firm’s exposure to amount to around AED 459 million, whereas Air Arabia’s official disclosure indicated over AED 1.2 billion ($336 million) in exposure.
This means that over 85% of Air Arabia’s investments are with The Abraaj Group, making the airline a risky investment, the analyst told Mubasher.
As for Abraaj’s sale of some of its key funds, in Latin America, North Africa, Turkey, and Sub-Saharan Africa, to Colony Capital as part of the court-supervised restructuring, Al Qaimiry stated that this deal would not help Air Arabia’s as the deal only includes funds outside of the UAE and in the aforementioned regions.
On 14 June, The Abraaj Group announced plans to file for liquidation and its request was approved a week later by a Cayman Islands court.
The liquidation will be a court-supervised restructuring that will ensure that the company’s shareholders’ rights are protected, the Dubai-based investment firm had said.
The issue began after allegations of money misuse in a $1 billion healthcare fund managed by Abraaj.