ABU DHABI, United Arab Emirates (AP) — The chairman of Arabtec, the embattled Dubai construction firm that helped build the world’s tallest tower, promised Wednesday to improve transparency at the firm and said it retains the support of a major shareholder backed by the Abu Dhabi government.
Arabtec is Dubai’s largest construction company and has played a key role in raising the skyscrapers, fancy villas and other buildings that have transformed the city into the Middle East’s commercial hub. Its operations extend beyond the Gulf, and include an ambitious $40 billion housing initiative launched earlier this year in Egypt.
Investors’ confidence in the company has plunged following a series of setbacks, with shares tumbling by as much as 70 percent from their peak in May.
The rout has dragged down the broader Dubai stock market, rekindling concerns about financial stability in the emirate following its 2009 financial crisis.
Arabtec shareholder Aabar Investments, a state-run fund backed by Abu Dhabi, last month cut its stake in the construction company from more than 21 percent to just under 19 percent, though a stock market error blamed on a technical glitch left traders puzzled when it initially suggested Aabar was reducing its holdings by a larger amount.
Weeks later, Arabtec CEO Hasan Ismaik abruptly resigned. He retains a sizable stake in the firm. Arabtec soon since announced a restructuring involving job cuts.
At the company’s first press conference since the tumult began, Arabtec Chairman Khadem al-Qubaisi said Arabtec will remain a publicly traded company and is committed to greater transparency.
“I can assure you that transparency will improve a lot in Arabtec over the next few months,” he said.
Al-Qubaisi spoke not at Arabtec’s offices but at the Abu Dhabi headquarters of the government-run International Petroleum Investment Company, which controls Aabar. He is also chairman of Aabar and said it is possible that company might increase its stake in Arabtec in the near future.
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