Bahrain sovereign fund to focus on transparency
Manama, January 22, 2010
Bahrain's sovereign wealth fund Mumtalakat is focussing on further improving its corporate governance before getting a credit rating and is relaxed about a parliamentary probe, its chief executive said.
Talal Al Zain told Reuters in an interview in Manama that the fund was still working on improving the financial reporting structures and corporate governance of its portfolio companies.
"Right now, today, my focus is that we apply better corporate governance on the companies that we own, starting with Mumtalakat", he said.
He said that Mumtalakat is working on complying with a new corporate governance code that will be introduced by Bahrain's Ministry of Industry and Commerce in mid-March.
Mumtalakat is a small sovereign wealth fund and its assets include companies with a legacy of state-run management such as Gulf Air and Aluminium Bahrain (Alba).
The fund is considered to be one of the most transparent sovereign funds in the Gulf region, as it publishes annual reports and discloses its assets.
The Dubai debt crisis has cast a long shadow over the region by highlighting the lack of transparency in particular in government actions and businesses.
Mumtalakat is seeking to further set itself apart by also seeking a credit rating, but Zain said the fund needed to do more work on the reporting of its portfolio companies.
"We would not go (to the agencies) until we have our shop together," he said, adding it was Mumtalakat's objective to be rated by the end of the year.
Zain also shrugged off a probe launched by Bahrain's parliament earlier this month into what it sees at mismanagement at Mumtalakat.
Some members of parliament have complained that Mumtalakat has injected money into its portfolio companies such as Gulf Air and Bahrain International Circuit without disclosing sufficient information.
"It's part of their duty as parliament to make sure that they protect the public wealth, and I'm all for it," Zain said.
Parliament has also complained that Mumtalakat has increased spending on consultancy services without informing a state tender board.
"We do talk to the tender board, (but) because of the urge of the transactions, we do it verbally and then we get it ratified," Zain said.
Unlike most states in the region, Bahrain has an elected parliament that can question government officials. Bills need to pass through an upper house that is appointed by the king. - Reuters