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Former head of Dubai Islamic Bank detained

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Points of Essence:

  • Dubai has intensified its crackdown on the financial irregularities with the latest arrest of a former CEO of Dubai Islamic Bank along with the executives of other state-link corporations. Last August, the global banking fraternity was shocked with a high profile probe of Tamweel’s former CEO for alleged corruptions.

The former chief executive of Dubai Islamic Bank has been detained as part of a probe into alleged financial irregularities at the bank’s real estate subsidiary, Deyaar Dev.

Saad Abdul Razak, who has also left his current post with Investment Corporation of Dubai, was taken into custody two weeks ago as the probe broadens, but the nature of the allegations are unclear, said a person aware of Mr Abdul Razak’s situation.

Mr Abdul Razak who last year left Dubai Islamic Bank to join ICD, the emirate’s holding company for state owned assets, is one of five people under investigation for alleged financial irregularities at Deyaar Development Company. Dubai public prosecution, which is coordinating the investigation, declined to comment.

The probe, which has yet to bring formal charges against any of those detained, comes amid precipitous declines in Dubai’s stock markets, liquidity injections into the United Arab Emirates banking sector and rising concerns about how the economy will weather a global recession.

Former executives of Dubai Islamic Bank, one of the oldest Shariah compliant institutions in the world, have been among those previously arrested as part of the broader graft investigation.

Police have also arrested executives from other state linked institutions, such as developers Nakheel, Sama Dubai and mortgage provider Tamweel, as the graft probe has flung its net across companies in the emirate’s fast growing real estate sector.

Analysts say the probe signals the government’s determination to clamp down on corruption, but some observers are wary that the top beneficiaries of any graft rings may go unscathed.

Nasser al Sheikh, chairman of Deyaar, says he expects the trial of Zack Shaheen, former Deyaar
chief executive, to go to court as early as next month.

He says no one will be above the law and the government will pursue cases if it uncovers evidence of wrongdoing.

By Simeon Kerr in Dubai


Note: Read AWSJ’s take on this issue here.


Written by Suapi Shaffaii

October 16, 2008 at 11:29 pm

One Response

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  1. it seems to me more coraption in islamic finance industry will come, unless if there is a quike movment twoard stricket regulation


    October 20, 2008 at 12:16 am

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