UAE family-owned firms urged to adopt new business practices

DUBAI - It is essential for the UAE family-owned corporations to adapt the new global business practices by attracting new shareholders and strategic partners, if they have to exist strongly in the marketplace, Abdul Rahman Ghanim Al Mutaiwee, the Director-General of the Dubai Chamber of Commerce and Industry said yesterday.

By Ibrahim Taha

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Published: Thu 1 Apr 2004, 12:11 PM

Last updated: Thu 2 Apr 2015, 11:33 AM

Speaking at the round table discussion organised by the DCCI yesterday on 'family businesses in the UAE', Al Mutaiwee said: "The family businesses have played an important role in building the foundation of business and economy in the UAE three decades ago and they continue to do so even now."

The discussions covered the issues and hurdles faced by the family businesses, which might have a negative affect on their development as well as the legal and administrative solutions in this respect.

Said bin Ahmad Lootah chaired the discussions which were attended by several leading figures in the business community as well as legal experts, academics and researchers.

A number of the participants pointed out that family businesses represent a transitional period in business, and they have to develop into effective businesses. They also highlighted that most of the big businesses in the world are family businesses, which have investments worth billions of dollars.

Others pointed out that some family businesses in the UAE do not enjoy the same level of administrative strength which international companies have while some insisted on the importance of providing incentives to the new generation now in charge of the family businesses.

They also discussed whether it is compulsory for family businesses to become public limited companies, and the importance of having laws regulating the family businesses. In addition to laws protecting the family businesses from the problems resulting from too many family members getting involved in the business. The speakers also highlighted the importance of those in charge to differentiate between ownership and management.

Ahmed Hassan bin Shaikh, prominent Dubai-based businessman, said: "The recent world economic challenges have proved that the family-owned corporations exist in the UAE and the entire Gulf region will not be able to resist the globalisation to stand strong and healthy. The family-owned corporations have faced a lots of legal difficulties in the last ten years, especially when the ownership is transferred to the new generation."

Juma Al Naboodah, Chairman of Al Naboodah Group of Companies, said, "There are prospects that the family-owned corporation will change and streamline their businesses with the latest market's requirements. The new generation and the future owners of these companies have realised the need for a new partners to help their business grow and achieve better results in the future."

Ali Yousuf, Executive Manager, Al Yousuf Group, said: "The UAE private sector needs to go radical changes to meet the modern economical theories and practices, especially in terms of legal aspects. The family owned corporation also exists in Europe, US and Korea, but there is a clear cut rules and regulations that governs these companies operations."

Abdul Wahid Al Rustamani, said: "Until today none of the family owned corporations have not transferred to a public joint stock company despite the great success of many public joint stock companies following the opening of the UAE stock markets in Dubai and Abu Dhabi."

Essa Kazim, Director-General, Dubai Financial Market (DFM) said: "The transformation of the family owned corporations to a public joint companies is a crucial step which will remarkably increase the capital of these companies and help them to expand their business beyond boundaries and compete with the international corporations. It is imperative for the UAE family owned corporations to undergo fundamental administrative and organisational changes, if they have to strongly exist in the market in the future."

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