Sitting in the office is so yesterdayMay 27, 2015 4:49
Shuaa’s shareholders may cut the rope
The company’s shareholders will decide its future on Wednesday. Shuaa has seen better days.
April 14, 2009 10:13 by Dana El Baltaji
Dubai-based Shuaa Capital is holding a meeting with shareholders on Wednesday to decide on the investment bank’s future, it revealed in a statement posted on Monday. In February 2009, the bank posted a AED577 million ($157 million) loss for the fourth quarter and a AED948.5 million loss for 2008.
The investment bank attributes its losses to “mark-to-market reductions of asset valuations,” the statement said.
Shuaa’s stocks have fallen from AED8.10 to AED1.10 per share since April 2008.
However, the bank claims its total equity base of AED2.3 billion is “more than sufficient to allow the firm to continue as an ongoing concern and operate all its business units in the future.”
In March 29, shareholders were asked to consider the bank’s future, and voted to keep operations going. However, regulators have asked the company and its shareholders to reconsider the company’s fate.
On Wednesday, shareholders will also be asked to approve an amendment that empowers the board of directors to renegotiate the terms of Shuaa’s convertible notes.
In January 2009, Shuaa delisted from the Kuwait Stock Exchange citing “inconsistencies in regulations between the DFM and the KSE, making it difficult for dual listed companies to comply with the regulations of both exchanges,” explained Oliver Schutzmann, head of the bank’s Investor Relations and Corporate Communications.
In December 2008, the company announced a 9 percent staff cut due to changing market conditions.
Eearlier in the year, the company was fined AED3.5 million (US$953,000) by the Dubai Financial Services Authority (DFSA) for manipulating DP World shares. “The manipulation of markets for ulterior motives is a classic form of market abuse that is outlawed in all well-regulated, exchange-traded markets,” said David Knott, the CEO of the DFSA. “Shuaa Capital artificially inflated the price of DP World shares and generated a false market in those shares. The seriousness of this offence was exacerbated by Shuaa Capital’s obstruction of the DFSA’s investigation.”