Will last Wednesday go down as the date of the beginnings of recovery in the Dubai financial sector? That was the day shareholders of Shuaa Capital took the decision not to drive the company into liquidation, which had been a valid course of action and one thrust on them for consideration by the regulator. Instead, the company was to carry on as a going concern.
It was not only Shuaa executives, employees and shareholders who breathed a sign of relief. The whole Dubai financial community should also take heart from the decision. Dubai has witnessed, and survived, its own “Lehman moment”.
Last September, US financial authorities faced a similar choice, but of a greatly different magnitude. Shares in Lehman Brothers, the 160-year-old blue-blood investment bank, had been on the rack for weeks as rumours swirled about the extent of its outstanding positions and potential losses in the market for collateralised debt obligations (CDOs).
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