The board of Drake & Scull International (DSI) issued a statement yesterday promising to complete a probe into misconduct by its previous management and announcing that it has filed new criminal complaints with the UAE Securities and Commodities Authority to add to the 15 it had previously brought.
The Dubai-based contractor launched the probe, alongside a restructuring plan, after allegations were made that its previous managers had concealed $857m in losses.
The statement added that a travel ban and an asset freeze had been put in place against "a previous executive manager, as well as one of his family members".
Shafiq Ahmed Saleh Abdelhamid, the chairman of DSI, said in the statement: "It is our duty to protect the rights of our shareholders who trusted us and invested in this company. 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 statement did not name any of the previous managers. However, 15 charges were filed last year against Khaldoun Tabari and his wife, and his bank accounts in the UAE were frozen in June 2018. Tabari, a Jordanian businessman, was formerly DSI’s chief executive.
In an interview with Arabian Business magazine in September, Tabari – who no longer lives in the UAE – denied any wrongdoing. He said: "Somebody has to be thrown under the bus. I am the scapegoat."
In January, Tabari and his daughter Zeina, who was also a director at DSI, launched a $1m legal claim against Tabarak Investment, the company that bought his shares in DSI in February 2017. Tabari claimed that Tabarak gave an undertaking to release him from his liabilities in DSI but did not do so.
A spokesperson for the Federal Public Prosecution office in Abu Dhabi said Tabari’s case was under investigation, and that a committee had been appointed to report on the case.
DSI began making losses in 2015 after the decline in oil prices hit its work in the oil and gas sector. Tabari left the company in 2016, after which five chief executives and four chief financial officers were appointed and dismissed. Trading in the company’s shares on the Dubai exchange were suspended in November 2018.
In April of this year, DSI said an internal investigation by its own fact-finding committee of "financial and legal experts", carried out in 2017, established that there had been "a deliberate and conscious decision by the previous management and board to defer announcement of losses for the years 2009-16".
The losses reached a total of $857m by 2017, equal to about three times the company’s capital. The fact-finding committee found that the previous executive management had failed to comply with corporate governance and transparency rules by reporting these losses to shareholders.
The statement released on the 6 November added that DSI had appointed Dubai financial services company SHUAA Capital to support its restructuring efforts and bring the company back to profitability.
Image courtesy of Drake & Scull