BREAKING NEWS - Dubai World ‘Independent’
Government's responsibilities not linked to company's transactions, officials say
Senior Dubai officials on Monday said the institutional responsibilities of the government are not linked to Dubai World's transactions, saying a section of the media got it "mixed up".
Abdul Rahman Al Saleh, director-general of the Department of Finance, on Monday told Dubai Media Incorporated (DMI) that Dubai World is a commercial entity and the company's transactions with creditors and investors were based on that. The group received financing based on its commercial status and the feasibility of its projects, he added.
"The gross mistake of the media is that they deem the company as part of the government. It is baseless," he said, stressing that the Government of Dubai has supported the group since its inception."
Lieutenant General Dahi Khalfan Tamim, Dubai Police Chief and Chairman of the Dubai 2010 General Budget Committee, said: "It is wrong to mix them up. it must be rectified by raising awareness among the media and people."
Lt Gen Dahi said the real estate sector in Dubai still offers the highest returns in the region.
Al Saleh said Dubai World has implemented huge projects of strategic significance in the emirate, but has been affected by the global financial turmoil — like many corporations worldwide.
Dubai World's debts and obligations were not guaranteed by the government, Al Saleh said, reiterating that it was set up as an independent commercial company.
"Though the government is the owner, the company has many activities and is prone to risks. So from the beginning it was indicated that the government is not a guarantor. Therefore, the dealings of the company with all parties were based on this concept," he said.
Al Saleh added that the creditors should bear part of the responsibility as they offered loans based on the viability of the projects and not on guarantees offered by the government.
Referring to the decision to restructure Dubai World, Al Saleh said it might have created inconvenience, but favours all parties in the long-term.
Al Saleh, who oversees the government's finances and budgetary activities, was critical of the media outcry over the restructuring plan. He said the reaction was disproportionate to the size of the problem.
Meanwhile, the International Monetary Fund welcomed the Central Bank's move to inject more liquidity into the financial system.
