Emaar to allow foreigners as board members

by Zaher Bitar for Gulf News, November 9th, 2010.

Shift in policy reflects Dubai developer’s readiness to strengthen corporate governance, analysts say.

Dubai: Shareholders of Emaar Properties yesterday approved a resolution to allow foreigners to become board members — a shift in its corporate policy that analysts say reflects its readiness to strengthen corporate governance. The new articles stipulate that a majority of board members will be Emiratis. It is, however, unclear how many foreigners will be inducted onto the board.

“Legally it was possible even earlier. However, with the resolution, it means that the company is ready to take corporate governance to the next level,” said investment adviser Raju Menon, managing partner of Morison Menon Chartered Accountant. “This will encourage international investors to forge alliances with Emaar. We could see Emaar joining some high-end collaboration with international partners.”

However, it is not quite clear how much of this has been driven by Emaar’s financial health, which was badly impacted by the fin-ancial downturn of 2008. Hussain Al Qamzi, deputy director of the board of Emaar, said, “We have modified the company’s Articles of Association in line with the UAE Companies Law. The majority of our shareholders are foreigners.”

At its extraordinary general meeting, Emaar shareholders yesterday also approved a $500 million convertible bond with a 7.5 per cent coupon rate. The conversion rate per bond has been fixed at Dh4.75. (continue reading… )


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