10/07/2018 07:31 AST

An internal probe by Drake & Scull International PJSC into alleged violations by the previous management has concluded that former chief executive officer Khaldoun Al Tabari and his daughter owe the contracting firm as much as Dh1 billion ($272.3 million), according to people with knowledge of the matter.

The amount exceeds the market value of the Dubai-based company, whose shares plunged about 70 per cent this year — the most among companies listed in Dubai.

Drake & Scull said last month that it had completed the probe and forwarded the report to authorities in the UAE. The central bank asked lenders to freeze accounts belonging to Al Tabari and his family, citing an order by Abu Dhabi’s public prosecutor, according to a June 4 circular seen by Bloomberg News.

Al Tabari could face charges if the UAE authorities decide to follow-up with their own investigation and reach similar conclusions, one of the people said. Bloomberg News contacted the former CEO several times for the story since Wednesday. He acknowledged the messages but didn’t comment. His daughter, Zeina Al Tabari, who also served as a senior executive, declined to comment.

Drake & Scull declined to comment, while the public prosecutor’s office didn’t immediately respond to questions. Al Tabari stepped down as CEO in October 2016 and later sold his stake in the company and resigned as a board member.

Drake & Scull has faced mounting losses since 2015 as contractors in the Gulf suffered from delayed government payments after the drop in oil prices. The company reported a loss of Dh1.18 billion ($321 million) in 2017. Last week, it appointed its fourth chief financial officer in three years.

Drake & Scull shares surged 11 per cent, the most in nine months, to 70.2 fils at the close in Dubai, giving the company a market value of Dh752 million. “Investors are using the news as a catalyst after the massive sell down of shares,” said Nabil Al Rantisi, managing director at Daman Investments in Dubai. “Recovery of this amount won’t be easy and may not happen at all.”


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