Lawsuits against Al-Gosaibi, Saad mount in UK

Pressure is building in the UK on Saudi business conglomerate Ahmad Hamad Al-Gosaibi & Bros (AHAB), with a series of lawsuits totaling at least $450 million filed against it in London’s High Court, according to documents seen by Dow Jones Newswires.

The high-profile, family-run group began to face scrutiny in May after it failed to repay some debts. It is now locked in a sour feud with fellow Saudi conglomerate Saad Group, which is also facing a London legal suit. International creditors are estimated to have some $16 billion in exposure to the two firms.

Both groups are working with their creditors for resolution, while the Al-Gosaibi group is already facing legal challenges from creditors in New York.

Heavy weather for ports operator DP World

The slowdown in global shipping this year has dragged down Dubai-based DP World’s first half net profits, which slumped 34 per cent to US$188 million (Dh689.9m).
Volumes for the port operator declined by 10 per cent between January through June worldwide and by 7 per cent at its flagship Jebel Ali terminal in Dubai amid a “very challenging operating environment”, said Mohammed Sharaf, the chief executive of DP World, the fourth-largest terminal operator with 49 terminals worldwide. The results were better than the global average decline of 15 per cent, according to Drewry Shipping Consultants in London.

Mr Sharaf said the “unpredictable trends in global trade” are expected to continue in the second half of the year, but pockets of growth in its emerging markets businesses should help counter the wider decline in trade.

The company is dealing with the sharpest fall in global seaborne trade since containerised shipping was introduced in the 1950s, with global trade volumes expected to decline by 9 per cent this year, according to the World Trade Organisation. The company has responded by reviewing and postponing nearly all of its expansion plans, although it has begun operating new terminals in Djibouti and Algeria, and renewed terminal concessions in Australia.

Islamic finance institutions add $580bn in assets

Total assets at the world’s 100 largest Islamic banks climbed by 66 per cent to more than US$580 billion (Dh2.13 trillion) last year, according to a report by Asian Banker.

The dramatic jump reflects the rapid growth of the Islamic finance industry as a whole, analysts say. While little reliable data exists on Islamic assets globally, the overall industry is by some estimates worth about $1 trillion and growing.

“Overall, 2008 was a relatively good year for the Middle East and Asian financial sector, with banks including Islamic financial institutions posting stellar performance in the first half of the year,” said Khalid Howladar, a senior credit officer for Islamic finance at Moody’s in Dubai. “The slowdown fully took effect only in the third and fourth quarter.”

Yahoo buy spawns e-commerce giant

One of the Middle East’s largest e-commerce companies has been created as a by-product of Yahoo’s acquisition of Maktoob, the region’s biggest internet portal.

While the US technology giant has bought the core Maktoob web portal, a number of businesses previously under the umbrella of the Maktoob Group have been spun off into a new company, to be managed by its co-founder, Samih Toukan.

“We will operate in a similar way to the old Maktoob group but the focus will be different, looking more at e-commerce, transactional businesses, things that nobody is doing enough of in the region,” Mr Toukan said.

Bank investment chief testifies in fraud trial

The chief executive officer of investment banking at Dubai Islamic Bank told a court yesterday that two defendants in a US$501 million (Dh1.8 billion) fraud trial were the bank executives responsible for facilitating credit allowances for a company that defaulted on its loans.

Saad Zaman, 42, told the Dubai Criminal Court of First Instance that in 2007 he was informed that CCH, a Turkish company, had defaulted on its loan instalments.

He told the court the bank was owed $170m by the company. “We found out that CCH had not used the funds provided according to the investment agreements set between us,” he said.

UAE-Qatar 'facing negative inflation'

Qatar and the UAE are likely to see negative inflation this year due to falling house prices, while inflation rates will slow sharply in Saudi Arabia and Kuwait, EFG-Hermes said in a note yesterday.

Inflationary pressures have dropped off rapidly across the oil-exporting region as crude prices fell from peaks of $147 a barrel in July last year and the dollar strengthened, easing import costs for states that peg their currencies to the US currency.

"The UAE and Qatar will see the greatest reversal in inflation trends," EFG-Hermes said in the research note.

Oil and trade lure Berlusconi to Libyan talks

Libya is the biggest provider of crude oil to Italy by far and its sovereign wealth fund may yet prop up some large Italian companies, but Silvio Berlusconi is discovering - like Gordon Brown of the UK - that to deal with Muammer Gaddafi can be a double-edged sword.

When he flies to Tripoli on Sunday, the Italian prime minister will be the first western head of government to greet the Libyan leader since the homecoming of the convicted Lockerbie bomber which has sparked a furore in the US and the UK.

Oil and business ties are expected to top the agenda when Mr Berlusconi joins Colonel Gaddafi to celebrate the accord they forged a year ago under which Italy said it would pay $5bn (€3.5bn, £3bn) during 25 years as reparations for its colonial rule, which lasted from 1911 to 1943.