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Dubai Govt Takes 30% Stake In Galadari Bros - Sources
By Simeon Kerr and Sarmad Khan OF DOW JONES NEWSWIRES
DUBAI (Zawya Dow Jones)--The Dubai government has taken a 30% stake in one of Dubai's oldest family-owned conglomerates, Galadari Brothers Co., according to a document seen by Zawya Dow Jones.
A memo dated Oct. 5 says that a decree from a judicial court appointed by Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, has restructured the shareholding of Galadari Group of Companies, which includes the English-language Khaleej Times newspaper, an auto dealership, three hotels and the franchise for
Baskin Robbins ice cream.
The memo says the existing board has been dissolved, and replaced by three temporary members, one of whom is the existing chairman of Galadari Brothers and the Khaleej Times' editor-in-chief, Mohammed Abdulrahim Galadari.
The memo, which was sent to the managers of 11 Galadari companies, was signed by Sharif Khoory and Yahya Kazi. It also says Khoory and Kazi have been appointed as directors of the executive board of Galadari Brothers.
Several people familiar with the move confirmed the memo's authenticity. Zawya Dow Jones' calls to Galadari's new representatives and representatives of the Dubai government weren't returned.
People aware of the matter say the government's 30% stake replaces Galadari's debt to the government and other Dubai royal-family owned companies.
The 28-year-old Khaleej Times, one of the Mideast's most established newspapers, is expected to undergo changes, said people familiar with the matter. Although Mohammed Galadari remains on the interim board, people aware of the issue say the government stake will effectively sideline his decision-making power in the companies, including at the newspaper, which runs under the strapline "The Truth Must Be Told."
The observers say that the editorial stance and quality of the daily, one of the few local newspapers to write critical articles on Dubai, raised government hackles.
"This board will perform its duties during the interim period, that is, until the formalities of including the Government of Dubai or any of its nominated Companies joining the Galadari Group with a shareholding of 30%, is completed," the memo said, adding that members of the Dubai government will also be represented on the new board.
People familiar with the matter said that the interim period will last for three months, during which due diligence will be carried out.
Dubai Holding, a company owned by Sheikh Mohammed, has interests across the economic spectrum. One of its firms, Arab Media Group, owns English and Arabic radio stations and newspapers in the emirate, including Emirates Today, a compact competitor to the broadsheet Khaleej Times.
Galadari Brothers, founded by the late Abdulwahab Galadari in 1969, went bankrupt in the mid-1980s, at which point the huge conglomerate was split between the sons.
Another firm, Ilyas & Mustafa Galadari, which is developing a city within Dubai's leisure Dubailand project, grew out of the family schism and isn't subject this shareholder change.
By Simeon Kerr, Dow Jones Newswires,
Last edited by Sandstorm on Sun Jun 19, 2011 12:52 pm; edited 6 times in total
