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Former CEO of Tamweel probed

DUBAI - The former chief executive of Islamic mortgage lender Tamweel, Adel Al Shirawi, is under investigation for alleged financial wrongdoing by authorities in Dubai, police said on Thursday.

A senior police officer, who declined to be named, said Al Shirawi was detained earlier this month and the case has been referred to Dubai Public Prosecution.

Zawya Dow Jones said Dubai Public Prosecution papers showed that Al Shirawi and Feras Kalthoum, a former head of investments at Tamweel, were being probed as part of an alleged "embezzlement and mistrust" investigation.

Al Shirawi stepped down as chief executive of Tamweel in January, according to Tamweel's public relations spokesperson. He is currently vice-chairman of Istithmar World and also sits on Tamweel's board of directors.

Istithmar World said in a statement that it "... acknowledges reports that Adel Al Shirawi and Feras Kalthoum are being questioned on certain alleged charges related to their previous positions at another company. Istithmar World is not under any investigation." The company is the investment arm of Dubai World.

In a Press statement on Thursday, Tamweel said: "In reference to recent media reports related to an alleged investigation conducted by the Public Prosecution in Dubai of the former CEO and member of the Board of Directors of Tamweel, as well as a former senior executive of the company, Tamweel PJSC reiterates that, to date, it has received no formal notification of such an investigation from the relevant authorities."

The company also said it wanted to reassure its shareholders and investors that these reports of an alleged investigation, if proven, will have no impact on the future profitability and financial strength of the company, whose activities continue to progress as planned.

Tamweel shares closed down 5.7 per cent at Dh6.11 on the Dubai Financial Market on Thursday whilst the main index closed 1.1 per cent down. The shares have declined 26 per cent since July 23 after rumours of an investigation first emerged. However, any further impact on the share price may be limited, according to Chamel Fahmy, a senior regional sales trader at Beltone Securities Brokerage. "It might put pressure on the stock but only minimal because people have been hearing rumours about it in the past few months. Part of the negative impact had already affected the markets in that period" he commented.

Tamweel last week said the company was not being investigated by Dubai authorities after its shares fell on traders' concern that the company was being probed.