By Ed Attwood
EXCLUSIVE: Ratings head claims requests for information went unanswered.
The regional head of Standard & Poor’s (S&P) has criticised the handling of the Dubai World debt restructuring, claiming that “there was no transparency whatsoever” in dealings with his ratings agency.
“We were trying to speak with everyone [Dubai World officials] from high to low – at the low level they were just as surprised as we were,” Jan Willem Plantagie, S&P’s managing director and regional manager Middle East told Arabian Business.
“At the high level, we couldn’t reach people. Some people wouldn’t comment – and it’s on that basis that you have to make your assessments.”
The executive also admitted that S&P could have changed its assumptions on the level of government support to Dubai World prior to the latter’s debt announcement in November.
“With the benefit of hindsight many things could have been viewed differently, including assumptions on government support,” Plantagie said.
“Having said that, clear statements from the top never gave rise to the suspicion that support would not be forthcoming.”
But Plantagie also claimed that the agency had constantly highlighted the potential problems linked to Dubai World property subsidiary Nakheel.
“We actually published a credit FAQ in October last year highlighting what would happen if this [government support] was not coming forward,” the S&P boss stated.
“So while at the time we assumed this support would be forthcoming, and that was based on comments of the highest officials here in Dubai, we had outlined scenarios about how to proceed if support was not there.”
“When you talk about general processes here in Dubai with Dubai World, yes, there is no transparency whatsoever,” Plantagie commented.
Dubai World declined to comment.
In the financial industry "no news is bad news!" Dubai needs to understand how to respond to the media and related agencies if it is to maintain investor confidence and its reputation. As a long time Dubai resident who loves the city I am pained to see this happening.
Not sure Mr Plantegie is acutally aware that his useless institution (AAA rated CDO's anyone?) doesn't rate Dubai World, so why would they share anything with them? And company's that have been sharing information with S&P only found that S&P would ignore the information and come up with their own (mostly emotionally driven) views of the world. Meaningless institutions should not be involved in this process and sorry to say S&P, you are meaningless.
@James, so who should be then looking into the situation of DP. Do you have any alternatives? Then you claim that S&P does not rate Dubai World... S&P rates several estate owned companies here in DUbai. I think what happened with DW is relevant Don't you agree? Same with the banks they rate, they have significant exposure to W (or so it seems). So if you want to avoid AAA rated CDOs maybe they should be talking to one of the biggest debtors of the banks they rate. But i have my bigger contention with your point that "S&P does not rate DW". As far as i know debt issued by several of the companies of the DW group was downgraded back in April 009... it seems you did not do your homework here. I find funny that you complain about emotional ratings... your post is not really into the fact-based thing.
This will further exasperate the prevalent gloomy business atmosphere. Dubai needs to be transparent, it cannot afford any more caustic article in the international media.