The shareholders of Dubai-based real estate developer Emaar Properties PJSC voted to return Mohamed Alabbar as chairman of the company Wednesday afternoon, a decision that was all but a foregone conclusion despite growing attention to his roles in competing companies.
After cutting the number of directors to 10 from 11, shareholders approved the remaining slate of nominated board candidates, including company founder Alabbar, at the 17th annual general meeting of the company held at The Address Dubai Mall Hotel.
Concerns have reportedly grown among investors over Alabbar’s roles outside the company – with speculation kicking into high gear in March after the announcement of the new $45 billion “Capital Cairo” in Egypt, which he is leading through Capital City Partners.
The Egypt deal raised eyebrows when Alabbar's role was revealed – Emaar Misr has begun the process to float shares on the Cairo bourse and the company is working on Uptown Cairo, a 4.5 million square meter project overlooking Cairo.
On March 19, Emaar was forced to make a statement to the Dubai bourse that Alabbar was not leaving – a day after its share price tumbled more than 5 percent. Was there a shareholder revolt underway? Much media focused on Alabbar's situation - but the drop came after the board's dividend proposal that did not include the 10 percent bonus shares that shareholders had received in 2014.
Then at the beginning of this month, Reuters reporter Hadeel Al Sayegh published " Dubai property king's outside deals stir investor unrest,” seemingly confirming that Alabbar’s future was at stake.
"This is something that is a concern for us,” Sayegh quoted one Emaar shareholder as saying, without naming the source. "There is a conflict of interest. The chairman owns a company in the same field.”
Citing a “brain drain” from several Emaar executives leaving for other Alabbar-affiliated companies, Sayegh painted a relatively dismal picture for Alabbar’s future at Emaar. But the story quoted just the single, anonymous shareholder.
That piece just fed more rumor and speculation – and Alabbar has been working ever since to tamper down the talk. On Sunday, Arabian Business published a sit-down interview with the executive, with him directly addressing the rumors.
It’s worth a read if you’re into corporate governance, or Dubai politics or real estate, but here are the key takeaways:
If you look at the law, I stuck to the law. I always got approval for me and for every board member to be able to participate in other companies. Everything is above board and within the law
But while I am doing that, what do the numbers say? How is the company doing? Let’s just talk about numbers. Look at the profits we deliver, because that is what matters.
And most importantly, regarding Sheikh Mohammed Bin Rashid Al Maktoum, ruler of Dubai, who holds 29.22 percent of Emaar shares:
I do not do anything without me talking to HH, he is the man who gave me unimaginable opportunities, and he gave me a chance to be who I am. And to trust me. And to create my career and my personality. And when I make mistakes he comes and pulls me up again. So I don’t do anything without talking to him.”
So does Wednesday’s vote clear the rumor mill and show that there is no shareholder dissent? Maybe. Are the concerns over Alabbar’s outside roles overblown? Well, clearly those concerns are smaller than the shareholders' satisfaction at consistently receiving 15 percent cash dividends, which were also approved at Wednesday's meeting.