Dubai Holding's chief executive took the helm of its property unit in a move likely aimed at assuring investor confidence after the division's chairman was ordered by a Dubai watchdog to face questioning over suspected wrongdoings.

The appointment came ahead of a multi-billion dollar merger between three of Dubai Holding's property units, including Dubai Properties, with the Arab world's biggest listed-developer Emaar Properties.

Ahmad bin Byat was named as acting chairman of Dubai Properties, Dubai Holding, owned by the ruler of the Gulf emirate, said in a statement on Sunday.

On Sunday, an official at Dubai's financial audit department confirmed a report in state-owned newspaper Emarat Alyoum on Thursday that it questioned Hashim Al-Dabal, chairman of Dubai Properties, over what it called financial irregularities.

The newspaper said Al-Dabal was being questioned 'over suspected financial irregularities and violations of rules and regulations' at the state-linked developer, before sending him to the general prosecutor to complete the investigation.

'The case ... is now with the public prosecutor,' the official, who declined to be identified, told Reuters.

Al-Dabal could not immediately be reached for comment.

'Dubai Holding and all of its business entities are committed to the highest levels of corporate governance,' Dubai Holding said in a statement on Sunday. 'As such we fully support the Dubai government's initiatives to uphold these standards.' - Reuters