Gulf insolvency laws go on trial

After almost a decade of healthy growth rates, strong profits and only a few blips to speak of, the Gulf’s corporate world has entered uncharted waters and several companies have foundered.

In Kuwait, two leading investment companies have already defaulted, and analysts warn that many more might be bankrupt. In the United Arab Emirates, two property developers in Ajman and Ras al-Khaimah have admitted they are insolvent, and across the emirates many other companies are said to be struggling to meet their commitments as cash flows are sapped by the crisis.

Even in Saudi Arabia, where the corporate world was expected to fare relatively well in spite of the economic headwinds, two leading family-owned groups have run into difficulties, triggering a rash of ratings downgrades and hushed speculation.