UAE regulator asks Emaar to clarify Saudi deal
Dubai, June 15, 2009
The United Arab Emirates' bourse regulator has asked Emaar Properties to give detailed clarification about a deal with Saudi Arabia's Kingdom Holding, the official WAM news agency said on Monday.
Emaar on Sunday denied it was investing in a development by Saudi Arabia's Kingdom Holding that will feature what would be the world's tallest tower, but said it was in a deal to offer management services against a fee.
"The Capital and Securities Authority has asked ... that Emaar Properties presents a clarification about the deal signed with Kingdom Holding that includes the details about the deal, its nature, value and the possible impact on the earnings of Emaar and in which period," WAM reported.
Emaar shares surged 7.18 percent on Sunday, the day after Kingdom Holding Co said it had appointed the Dubai-based firm as developer of the project, with a total investment of at least 100 billion riyals ($26.7 billion). The share tumbled 5.74 percent on Monday.
"The statement from Kingdom Holding was misunderstood, Emaar clarified its role in the project today," said Roy Cherry, Shuaa Capital vice-president for research.
"Emaar has been appointed supervisor on the project, against this service the company will charge a fee. As such it will not be exposed to the risks nor reap the full rewards of this 100 billion riyal project."
Kingdom Holding, owned by billionaire Prince Alwaleed bin Talal, said on Saturday in an emailed statement that Emaar would be in charge of developing and supervising the construction of the Kingdom Tower.
Emaar, the region's largest property developer, is currently constructing the world's tallest tower, Burj Dubai, in the emirate -- a regional trade and tourism hub.
Prince Alwaleed, the chairman of Kingdom Holding, signed the deal on behalf of Jeddah Economic Co with Emaar chairman Mohamed Alabbar, Kingdom said in its statement on Saturday. - Reuters