Abu Dhabi shakes up top brass to drive growth
Abu Dhabi, August 25, 2011
Abu Dhabi is shaking up top management at its state-linked corporations as it tightens its grip on the strings controlling its vast wealth and holds those in charge more accountable.
At least nine Abu Dhabi-owned or controlled companies have undergone changes to senior management this year, and more reshuffling is expected as the capital of the UAE puts more focus on strengthening its core activities.
"For some of the commercial entities, there is a view, at the higher level, to bring in fresh ideas and people who can approach Abu Dhabi's economic strategy ... with a new mindset," said an Abu Dhabi-based banking source.
"Some of these moves are quite possibly performance-related, the government wants to make top officials accountable."
Abu Dhabi is home to 90 per cent of the UAE's oil wealth and analysts polled by Reuters in June estimate the UAE economy will expand by 3.7 per cent in 2011.
The moves follow on from a reshuffle in Abu Dhabi's government in December in which five members of the ruling family were replaced on the emirate's Executive Council, which was trimmed from 18 to 14 members.
Although it has fared better than neighbouring Dubai, Abu Dhabi was not immune from the global economic slowdown. Investment and property firms took a painful hit, forcing the government to undertake a review.
Some firms such as Aldar Properties and Tabreed were thrown a lifeline by the government.
As a result, there is growing acknowledgement in top government circles that some of Abu Dhabi's more commercially motivated entities must be held accountable for their investment decisions.
Shuffle at the top
The changes at the most senior levels of Abu Dhabi institutions have ranged from the property and investment sector to energy and telecommunications.
The key moves include:
The board of government investment vehicle Mubadala Investment Company, chaired by the Abu Dhabi crown prince, was reshuffled by ruler's decree on Aug. 4 which replaced two of its members.
In March, the company, one of few state-controlled vehicles to publish results, reported a 2010 loss of Dh315 million ($85.8 million) due to mark to market writedowns.
Abu Dhabi National Energy Company (Taqa) and Tourism Development and Investment Company (TDIC), both identified as strategic firms by the government, and developer Aldar Properties have all replaced senior executives as part of a shake-up.
"It's all about putting the house in order in these very challenging times," said a senior Abu Dhabi government official on condition of anonymity.
Amid ongoing changes, telecoms operator Etisalat on Wednesday announced the appointment of its former chief operating officer Ahmad Abdulkarim Julfar to a newly created group chief executive (CEO) role as part of a new global expansion strategy.
"Abu Dhabi is serious about performance, strong leadership and managerial efficiency," another Emirati banker said.
Abu Dhabi, the largest of the seven emirates which make up the UAE, also houses one of the world's biggest sovereign wealth funds, the Abu Dhabi Investment Authority (ADIA).
Earlier this week, it was disclosed that ADIA had restructured its key external equities department, appointing the ruler's son to head a newly created department.
One analyst noted that although restructuring remained the general theme, ADIA should be treated as an exception because it had a history of internally promoting its staff and is more independent than newer state-linked enterprises.
As part of a broader reorganisation underway in Abu Dhabi, the government also plans to crack down on undisciplined issuance by state entities and to review the value of investments made by state funds.-Reuters