Arabtec has announced that it has accepted the resignation of Hasan Ismaik, its chief executive, owing to "personal work and investment preoccupations". The news comes after the United Arab Emirates (UAE) contractor lost half its market value in the past six weeks.Â
The two principal shareholders in Arabtec are Ismaik and the state-owned investment company Aabar Investments. Ismaik, whose personal wealth was estimated to be $1.4bn before Arabtec’s share price began its slide, last month raised his personal stake in the contractor from 8% to 29%. At the same time, Aabar decreased its stake from 22% to 19%.Â
The share price began to slide after rumours began to circulate that Ismaik and the management of Aabar had fallen out over the company’s business strategy. In particular, Aabar’s decision to cut its holding led to concerns that Arabtec would lose its special relationship with the government of Abu Dhabi, and therefore the federal government of the UAE.Â Â
Although Arabtec has recently expanded its presence in north Africa, Europe and Russia, it has tended to be the first choice contractor for projects backed by funds from the UAE.
Earlier this year it won one of the biggest schemes ever let in the Middle East: a $40bn deal to build a million affordable homes in Egypt; the UAE has provided about $7bn in aid to Egypt since the fall of the Morsi government last year.
In an interview with Al Arabiya television on Wednesday, Ismaik said he was leaving Arabtec because he wanted to look after his own business. He also said he would consider selling his stake in the company if he received an attractive offer "from a government entity".
Sanyalak Manibhandu, manager of research at NBAD Securities, one of the UAE’s top brokerages, told the Reuters news agency: "I just hope things settle down. The company has to assure investors that the strategy it’s built up since the end of 2012 remains in place, or if it isn’t in place what changes will be made. Investors need to know what’s going on."
Mohamed Al Fahim, a board member for International Petroleum Investment Company, the parent company of Aabar Investments, is acting as temporary chief executive.Â
In 2013, Ismaik was listed first in Construction Week Online’s ranking of the 100 most powerful persons in Middle East construction. He was appointed chief executive last year. Arabtec is the UAE’s largest listed construction company.Â
Arabtec issued a statement yesterday, expressing its "positive aspirations for a bright future and continuing to make more achievements, which aim to protect the rights of shareholders and to maintain and achieve the best interests of the Company and its shareholders and investors".Â