Deyaar to beat 'expectations' - chairman

DEFYING EXPECTATIONS: Al-Shaikh said the developer would beat profit expectations this year. (ITP Images)

Dubai developer Deyaar will defy profit forecasts, despite an on-going police investigation into financial irregularities at the firm, the group’s top executive said on Tuesday.

Nasser bin Hassan Al-Shaikh, chairman at Deyaar, told UAE daily Emirates Business 24/7 the alleged fraud at the company will not impact the developers profitability.

“The wrongdoings will not affect our profitability as the transactions have been recorded in our past profits. So they will not have any impact now. We have become more aggressive on project launches. Besides, escalation in property prices is working in our favour,” Emirates Business quoted Al-Shaikh.

Deyaar’s former Chief Executive Zack Shahin is being investigated for fraud, after being arrested in April. According to unconfirmed media reports, the Public Prosecution is investigating company fraud valued at 120 million dirhams ($33 million).

Shahin and two other officials at the company, Dubai's third-biggest developer by market value, are being detained and questioned in connection with the alleged fraud. Two Deyaar board members have also resigned.

However, Al Shaikh said despite the investigation, Deyaar will beat full-year profit forecasts of analysts and “certainly surpass” expectations to record strong growth quarter on quarter.

The company is also considering buying stakes in construction companies later in 2008, and plans to build mid-size communities housing at least 30,000 people, he said.

Deyaar, an affiliate of Dubai Islamic Bank, develops, rents and manages properties and operates according to Islamic law, or sharia, which bans borrowing or lending on interest.

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READERS' COMMENTS

What about an efficient market?
Posted by Subhash Rajapakse, Dubai on Saturday 31 May 2008 at 12:59 UAE time


If UAE is the achieve its status as the financial hub of the Middle East, which obviously is not a far cry, it is very important that they have an efficient market. A key fundamental of an efficient market is information and how efficiently and effectively all material information are embodied in to the market.
Unfortunately in the Deyaar case, this has not happened at all, what we have had were bits and pieces of information flowing at irregular intervals. I guess it is up to the higher management of Deyaar, whatever has happened has happened, but the ordinary shareholders and the general public (part of which may be potential investors) has a right to know the effect (if any) of what has happened so that they can fathom their own future decisions in relation to Deyaar.

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