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Tue 19 Aug 2008 08:32 PM

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Tamweel: Corruption probe will not hit profits

Dubai mortgage lender remains on course for 80% profit growth - financial chief.

Dubai mortgage lender Tamweel said on Tuesday the possibility that an investigation into former executives could lead to cash losses was "remote" and there would be no impact on profit.

The sharia-compliant firm has no intention to change its 2008 profit growth target of up to 80 percent, chief financial officer Gaurav Agarwal said in a conference call with analysts.

"It is a very remote possibility of cash losses. There is no hole in the balance sheet," Agarwal said. "We are very confident that there is no impairment on the profits."

Tamweel's former chief executive Adel Al Shirawi and head of investments Feras Kalthoum were under investigation for alleged financial irregularities, Tamweel's biggest shareholder, Istithmar World, said last week.

Shares of Tamweel have fallen about 21 percent this month mainly on the news.

"There is no direct impact on our financials in terms of any profits or any writeoffs," Agarwal said.

The government of Dubai indirectly owns between 35 to 38 percent of Tamweel, he said, adding that the company was not under investigation by Dubai authorities.

"There is no investigation into Tamweel, there has been a government audit," Agarawl said.

Dubai's audit department, a body that reports to the emirate's ruler, audits all firms in which the government owns 25 percent or more, and passes any violations on to the public prosecutor's office.

Government investment unit Istithmar World owns 21.6 percent in Tamweel and Dubai Capital Group, another state-owned firm, holds about 10 percent, he said.

Tamweel Chief Executive Wasim Saifi said in April he expected profit to rise as much as 80 percent this year driven by core business. (Reuters)

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