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Mon 30 Nov 2009 06:19 PM

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Al Habtoor slams Dubai debts 'over reaction'

Top UAE businessman blames jealousy of media, analysts for damaging emirate's reputation.

The chairman of one of the UAE’s largest conglomerates on Monday defended the emirate against what he described as a “grand, grand over-reaction” to debt crisis.

Khalaf Al Habtoor, chairman of Al Habtoor Group, blamed analysts for exaggerating the extent of Dubai’s problems, saying that media coverage had been overblown.

“The worst people are analysts. [If] they know so much, if they can assess countries and companies and individuals, you would think they’d be the richest people on earth,” he told Arabian Business.

“They’ve damaged Europe before, with their analysis, they’ve damaged America, the dollar has weakened, and they’ve damaged Japan with their stories of the yen.

“[They] can’t make an economic call themselves – they are the worst people on earth. I can say the word ‘jealousy’.”

Dubai last week said it would ask creditors of state-backed Dubai World and Nakheel to agree to delayed debt repayments, as part of a wider restructuring plan. Dubai World has $59bn of liabilities, representing a large part of Dubai’s total debt of $80bn.

Dubai World subsidiary
DP World

will not be part of the restructuring process.

Al Habtoor said there was no question that the emirate was committed to settling its debts.

“Dubai has never, ever defaulted from any commitment since the first brick was built on its soil,” he said.

Al Habtoor Group is one of the UAE’s most prominent firms, employing an estimated 40,000 staff across a number of sectors, including construction, hotels and real estate.

Arabian Business: why we're going behind a paywall

ALAUDDIN KHAN 10 years ago

I fully agree with the observations made by Mr. Al-Habtoor. Media, insted of presenting a fair analysis of the facts, prefers to sell their product through making it hot and spicy. The re-scheduling of debts payment of Dubai World had been overblown by the media in such a fashion that it is the world's greatest debacle of the year. The news item aired by media gave a high voltage shock to investors, which resulted in a panic and world markets noose dived. But, after realising their mistake of getting trapped by media, the investors corrected their mistake and the markets started recovering. Who knows this news item had done how many billions of Dollar loss to the traders during these days. The rating agencies are also equally responsible for such debackles. How they are giving ratings without thorough and deep assesments of the company. The financial structure, cash flow, debts repayment schedules, liabiities, liquidities etc. of a company do not change overnight. These are the fundamentals, which rating agencies should know all the time and should be based accordingly. Dubai World re-scheduling of 50billion$ has not come up in one day. Why it was not exposed by Moody earlier. Did they came to know about it through media new item? When the whole world knew about it, then they, in one day, reduced the rating. If the rating agencies want to earn the confidence of investors and traders, we expect from them a realistic and impartial ratings

Hal-Luke Savas 10 years ago

I agree with the Chairman of Al Habtoor.. There are too many scaremongerers who would prefer us all to possess 'herd mentality'. Given that UAE is not a banana republic, the chances of real recovery is not negligible, but real. However, maybe this is a wake up call so that we shall not be witnessing the herd leaving UAE in haste with their Ferraris abandoned at the airport car parks. Maybe Mr Al Habtoor can lead the second UAE revolution by encouring SMEs to take the lead in real production rather than aforesaid herd practicing their speculation instincts. In short UAE needs real production and not speculation. Hal-Luke Savas MBA FCIM MBIFM ICIOB affCIBSE londonhs@aol.com londonmanagement@aol.com

foud 10 years ago

very right and bold comments, thanks Mr Chair man we want Dubai to fly higher and higher and always breaks its own records we wish best luck to Dubai we love you Dubai

Firas Al Majdalawi 10 years ago

I totally agree with Mr. Al Habtoor views; and i strongly believe that other Dubai flagship businessmen would have the same views. Media has been oversizing the Dubai credit/ real estate downturn. Acutally i want Moody, Hermes, Shuaa and other star analysts to give me one location on the entire earth which witnessed dramatic increase in valuse in terms of stock markets, banking profits, real estate ?? UAE companies have been operating since 80's with solid capitals, even before Moody got established !! and only late 90's new names has been given to reflect the UAE and Dubai visions. So how can Moody easily and after one day only announce a downgrade, actually who cares about Moody ? When i decide to buy stocks or properties Moody doesnt ring my bells at all. Where are the other heroes who always recommend buy/sell advice to DFM or ADX ..? Why couldnt the predict that there might be a price slump where we can buy in cheap prices ? This country, and inspite of all romours is the healthiest environment for business even during the recession. At least we havent seen banks closing, where employees carrying there files in boxes and going back home. Analysts, get a peice of mind and try to be more realistic once you think of generating a report, which at the end of the day relates to oil producing country, and it is ONE country.

Mark 10 years ago

Rather than try and point blame at the media, perhaps these big companies can start paying off their debts to employees and contractors who have completed jobs that they have yet to see revenues from! The media may have overreacted but then again, this is not the first time a major company has caused a stir in the markets. To the CEO's of these major companies: Do the right thing, pay off your debts. The media maybe bad-mouthing Dubai as of late but there is some truth among the exaggerations.

Harry winston 10 years ago

Dubai had overstretched itself. It seemed like a good bet until Lehman collapsed and unfortunately for Dubai the bubble burst. All of us were caught up in the speculative bubble and we all loved the thrill and the adrenaline rush. Our greed clouded our senses. Now we have more offce space ,residential space than we need. Genuine buyers will suffer the most with lower rents. It will be a long hard struggle lasting atleast 10 years to see real recovery. But its a good time to shake the system . Banks,offices offered no real services, were filled with third rate managers and advisers with no real qualifiactions. Its time to rid the service industry of such people and infuse real talent with real experience. Pay for quality and you will succeed. I do not want to sound racist but bring back good old time, hard knocks , no nonsense British management, and rid off ripoffs with tight suits, overhanging bellies, chain smoking,greasy haired do nothings looking for a fast buck type of manager who gives Dubai a bad rep.

Francisco Fernandes 10 years ago

During this difficult time of recession we have to praise the chairman of Al Habtoor Group for giving word of confidence and boosting the morale of all the citizens of UAE, Residents and business. Are there no other prominent business in UAE who can also come out with statement of confidence in Dubai and the business prospects as whole. The Dubai Government has done so much and doing so much to help its citizens, residents and business and in this difficult are the big business houses should atleast come out in strong moral support statement lift the confidence of the investors working comunity and business as a whole, please can other big business houses in the UAE like Al Futtaim, Al Ghurair etc come out with supporting statements ! If all the major business houses keep quites then the so called analyst or useless predictioners will keep releasing their stories and rumours and harm the prospects even more than what it is.

Simon 10 years ago

Fine words indeed from Mr Habtoor...but isn't this the same man who wrote an article on this site not 2wks ago stating the "party is just beginning"?

Mohan 10 years ago

As rightly expressed by Mr. Khalaf Al Habtoor. UAE in particular Dubai i was the hope for the west and east in all times. Every country have their challenging days on their development path and We Keralite Indians always dedicated their life for this country and this country always acted like feeding mother to all of us. We believe in them and apload their courage and wisdom to overcome these crisit as United Arab Emirates, though Dubai's made few mistake in judging the economics as growing child, but they will learn and correct and overcome with a great country. Every Indian need to stand with Dubai in all possible means....a canteen boy to the business tycoon and Government of India. This country cannot be in trouble..this is the fact of facts, its leaders are great humans...blessed by God. I pray these crisis will be soon over...