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Wed 6 Nov 2019 04:16 PM

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Drake & Scull chief vows to complete probe into 'hidden losses'

Chairman says new management is committed to completing ongoing investigations into all actions taken by the company's previous management

Drake & Scull chief vows to complete probe into 'hidden losses'

Shafiq Ahmed Saleh Abdelhamid, chairman of DSI.

Drake & Scull International on Wednesday announced that its new management is committed to completing ongoing investigations into all actions taken by the company’s previous management and ensuring that shareholder rights are fully protected.

DSI said it has already filed 15 criminal complaints against the previous management, members of the previous board of directors and some of their family members, and these complaints are still under investigation by the relevant authorities.

A travel ban has reportedly also been placed against a previous manager, who was also an executive board member, as well as against one of his family members while authorities have also issued a directive to freeze the bank accounts of the manager and his wife as well as to seize properties registered under their names, a statement from DSI said.

Former Drake & Scull CEO claims he's a 'scapegoat' for rising losses

Khaldoun Tabari says the Dubai-based contractor has filed 15 complaints against him to the public prosecutor in the UAE

Shafiq Ahmed Saleh Abdelhamid, chairman of DSI, said: “We will pursue everyone who was involved and is proven guilty of jeopardising in any manner the best interests of our shareholders and undermining their trust in the company.

"The investigation is still ongoing to uncover any other offences committed by the previous management. However, considering the confidentiality and privacy of investigations conducted by the relevant authorities, it is important to avoid making any statements that might impact the probe.

"We are all endeavouring to provide the evidence to the relevant authorities to ensure a verdict that fairly protects the rights of all company shareholders, including governmental institutions such as the Social Security Fund, Dar Zayed for Family Care and the Social Care & Minor Affairs Foundation.”     

DSI said in the statement that press reports that the executive manager was absolved of his previous duties and liabilities by the company shareholders are incorrect and not based on facts.

According to UAE laws, any such absolution can only be issued by the General Assembly Meeting of a company.

DSI said ongoing investigations have in fact led to the filing of additional criminal complaints.

The internal investigations have established that during 2009-2017, the company suffered a series of annual losses that were hidden from shareholders.

The losses increased from AED939 million in 2015 to AED1.396 billion in 2017, reaching a total of AED3.15 billion by 2017 and representing approximately three times the company’s total paid up capital.

"These hidden losses are the result of the previous executive management’s failure to comply with corporate governance and transparency rules, and lack of proper managerial and financial standards, the fact-finding committee observed," the statement noted.

On the current financial status of the company, Abdulhamid said that the new management is committed to accelerating the implementation of an ongoing restructuring plan in collaboration with Shuaa Capital.

“We are awaiting the results of the ongoing investigations and a fair verdict that will protect the rights of our shareholders and help the company to rebuild its reputation and reinforce its claims,” he added.

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