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Clearing the web around Dubai

Clearing the web around Dubai

Affirming that the Dubai bubble has not burst, officials in the city accuse the media of wrongly equating Dubai World’s debts to the government.

December 1, 2009 2:36 by



“Dubai has rather an issue of unfair competition by some circles which seek to undermine the successful emirates and to unseat it as a global centre for finance and business and a magnet for foreign investments that thrived and succeeded in Dubai,” Tamim added.

He also said that Dubai World’s decision to delay its debt was blown out of proportion.

“I noticed that Gulf and foreign media, as well as a large segment of general public, confuse between debts of Dubai government, which are almost non-existent, and the debts of local companies. This confusion should be corrected and the public should be made aware that to separate between the two types of debts,” he added.

Abdul Rahman Al Saleh, the director general of the Dubai Finance Department has also said that the response by world markets was “exaggerated” and that the media has wrongly reported Dubai World as part of the government and its debt as sovereign.

“(Dubai World) is a company set up with commercial basis and its transactions with creditors and investors were based on that respect,” he told reporters at a press conference in Dubai. “The gross mistake of the media is that they deem the company as part of the government. It is baseless,” he added.

“Creditors should bear part of (the) responsibility as they offered loans as per feasibility of (the) projects and not upon the guarantees offered by the government,” he said.



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2 Comments

  1. mark rogers on December 8, 2009 8:54 am

    So let me get this right….billions of pounds are wipped off stock markets of those banks who BELIEVED Dubai would repay its debt when it said it would. Did the media get that wrong? Dubai’s ‘no one understands us’ stance is laughable. The internal workings of these quasi government entities (structuring of soverign verses non soverign debt) ie. Nakheel only comes to light when something like this happens. Such is the censorship that reporters get jailed, deported, threatened, if they try and report the real facts. So don’t lambast the foreign media for doing what local reporters can’t. If the government wanted to save the reputation of Dubai, it would have bailed the troubled entities out. How stupid that they didn’t. All the money spent on superlative PR on Dubai is now down the drain. The government may believe its own publicity but the rest of the world doesn’t. Sic.

     
  2. marvin miles on December 8, 2009 10:26 am

    I’ve just read this: if Dubai’s ruler wanted to get the country out of trouble, I’m sure he could raid his own piggy bank. Oh and er, the reported it$20 million spent on the National Day fireworks might have helped also;

    Dec. 2 (Bloomberg) — The credit crisis in Dubai that shook world markets hasn’t stopped the country’s ruler Sheikh Mohammed bin Rashid al Maktoum from buying race horses.

    Sheikh Mohammed was the top spender at the Tattersalls sales in Newmarket, England, on Nov. 27, two days after Dubai World, a state-run company grappling with $59 billion of liabilities, said it would ask creditors for a “standstill agreement” on its debt.

    His advisers bought eight foals for a total of 1.12 million guineas ($1.95 million) for him as stock markets slumped around the world on concern over a default. His biggest purchase was a 260,000-guinea colt sired by Invincible Spirit.

    “The horse side of the business is the private enjoyment of Sheikh Mohammed, so therefore has nothing whatever to do with the government, or government funds and the restructuring,” John Ferguson, his main bloodstock adviser and buyer, said in an interview at Europe’s biggest horse auctioneer yesterday.

    Dubai’s announcement Nov. 25 that Dubai World would seek to delay debt repayments stoked concern that a potential default would set back the global financial system’s recovery. It triggered the biggest stock market slump in three months in Asia and Europe’s worst rout since April as the debt request risked adding to banks’ losses.

    Stocks rallied from Shanghai to New York yesterday as Dubai said half of Dubai World’s obligations are “stable.” Dubai is in talks with its lenders to restructure $26 billion of debt, easing concern that a default would add to the $1.7 trillion financial companies around the world have written down as the credit crisis impaired the value of their assets.

     

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