Monday, Aug 18, 2008

Dubai: A cross section of business leaders such as chief executives, economists, chartered accountants and finance professionals yesterday welcomed the Government of Dubai's zero tolerance policy towards corruption.

Dubai's Public Prosecutor said in a statement that the government would take strict action against all acts of corruption while it is committed to policy measures to enhance business confidence.

"The government has created an ideal environment here, which is supported by a legal and legislative structure that depends on the best global practices. The government will continue this policy, which made it gain the confidence of business leaders throughout the region and the world," Dubai's Public Prosecutor said.

Dubai's business fraternity views the government's strong commitment to weed out corruption will go a long way in instilling confidence in an economy that has been rocked by a series of corporate scandals involving alleged cases of bribery, insider trading and embezzlement.

"Ensuring the upholding of the very highest standards of corporate governance and transparency is critical to the long-term success of both companies and governments." On behalf of DeyaarDeyaar, I offer our complete commitment to contributing to this mission of maintaining and enhancing the emirate's global reputation for best practice corporate governance," said Nasser Bin Hassan Al Shaikh, chairman of Deyaar DevelopmentDeyaar Development.

Delegates at a recent Corporate Governance Forum (CGF) in Dubai warned that the Gulf region has a long way to go before it meets international standards, while its breakneck growth and lagging controls made it prone to corporate failures.

"Fighting corruption is very important for any fast growing economy. Historically Dubai and the UAE had good rating in business practices and transparency in public and private sector. The recent investigations are a clear sign that government is committed to keeping the emirate corruption-free. The decision is very important for Dubai Chamber as the clean image of the city will help us in attracting foreign investments," Hamad Bu Amim, Director-General of Dubai Chamber.

According to a survey of regional institutional investors by HSBC last year, nearly two-thirds of investors (64 per cent) said that poor corporate governance is "a significant barrier" to market performance.

Ahmad Humaid Al Tayer, Chairman of Emirates NBD, said the latest government move is a great step towards a more transparent economy and business community. We will support every move towards higher standards in corporate governance in the country. The clear policy and actions of Dubai government in fighting corruption will enhance people's confidence in Dubai as a global investment destination. In the domestic markets too it will enhance the confidence level of small investors."

Despite the regional deficiencies in governance standards, the UAE is one of the first countries in the Gulf that has recognised the urgent need to address the issue. The Dubai International Financial Centre's (DIFC) Hawkamah Institute is making pioneering efforts to raise the bar in corporate governance.

Commenting on the government's commitment, Dr Nasser Al Saidi, Chief Economist of Dubai International Financial Centre said: "Sending a clear message is very essential in promoting corporate governance and best practices. The government's stance has been clearly communicated to all stakeholders. This approach will definitely enhance confidence of investors and creditors."

"The government's decision to deal with these issues in a transparent way is a welcome move. While the latest investigations are expected to stamp out the wrong practices, we expect this to send a clear and unambiguous message to the business community both domestic and international that Dubai means clean business," he said.

By Babu Das Augustine

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