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Saturday, 20 February 2010

Why revelation is more valuable than transparency

I cannot remember which illustrious journalist said it, but it went like this: “News is what somebody, somewhere does not want you to publish. All the rest is public relations.”

I remembered this aphorism last week during the growing calls for greater transparency in the affairs of Dubai World, the emirate’s former flagship company now locked in negotiations with its bankers over US$22 billion (Dh80.8bn) of outstanding loans.

Suddenly everybody, it seemed, was clamouring for greater disclosure by Dubai World of the progress of those talks. Lord Mandelson, the British business minister, was joined by Neal Wolin, the deputy secretary of the US treasury, in demanding more openness. The Financial Times added to the crescendo with a thundering leader entitled “The Murky Gulf”. Even the usually-restrained IMF got in on the act towards the end of the week. Surely, if such eminent people and organisations are demanding it, it must be a good thing.

Vegas venture a good bet despite losses, MGM says

MGM Mirage, Dubai World’s joint venture partner in the US$8.5 billion (Dh31.22bn) CityCenter complex in Las Vegas, is anticipating that the resort will provide a much needed boost to the company’s bottom line.

Jim Murren, the chief executive of MGM Mirage, made the comments after the gaming operator on Thursday reported a fourth quarter loss of $433.9 million, worse than analysts had expected.

Dubai World, through its subsidiary Infinity World, owns 50 per cent of CityCenter, which opened in December amid slumping revenues, soaring unemployment and foreclosures in the US desert city. Dubai World, which is working on restructuring $22bn of debt, also took a 9.5 per cent stake in MGM Mirage in 2007.

Kuwaiti family suing Bank Sarasin for $225m

Three members of a prominent Kuwaiti family are suing Bank Sarasin, a Swiss financier, for US$225 million (Dh826.4m) in Dubai after bankers allegedly provided them with “negligent investment advice” that led to losses, court documents show.

The case is part of a growing number of disputes in the region where wealthy families and investors are taking action against banks that handled their investments.

Credit Suisse filed a claim against the private bank Ansbacher & Co in London this week for allegedly misleading a client into investing in a Dubai property development that had “yielded no positive result”. Ansbacher is part of Qatar National Bank.