UAE stock market investors left high and dry by

18/01/2015 06:09 AST

Elie Ibrahim had just two days to sell his shares in Tamweel before the mortgage financier was delisted from Dubai's stock exchange.

It was September 29, 2013, and the stock was plummeting and touching its maximum one-day price drop of 10 per cent, as investors rushed to dump their shares rather than hold onto them in an unregulated market.

Tamweel was being taken over by Dubai Islamic Bank (DIB), a majority shareholder, and had made an offer to shareholders to swap their shares in Tamweel for shares with Dubai's biggest Sharia-compliant lender.

Mr Ibrahim, a day trader, put an offer and managed to sell just 20,000 shares at Dh1.09 of his total portfolio of 250,000 shares. He had bought the shares at Dh1.55 earlier in the year. On September 30, however, he put an offer on his remaining shares but nobody was willing to buy.

This was the second time Tamweel was going to delist. It was suspended from trading in November 2008 when it was on the brink of collapse, as a result of the global financial crisis and resumed trading in May 2011 only after comprehensive restructuring. In the period from 2011 to the end of 2013, Tamweel gradually attracted more interest from retail investors, as its stock was highly liquid and traders could move the shares in a speculative manner.

This time around, however, Tamweel was being delisted because it was going private.

Mr Ibrahim held out handing over his shares because he thought he could wait for a better deal. But today he cannot sell his shares in the OTC market. There is no custodian or registrar assigned to honour a trade in shares of Tamweel, he alleged.

Today, he wants to offload his shares, yet has nowhere to go. He has approached the markets regulator, the Securities and Commodities Authority (SCA), and the Dubai Financial Market exchange, only to be turned away because the company is no longer publicly listed. The stock ceased trading on October 1, 2013.

Requests made for comment from Tamweel, DIB, Dubai Financial Market and the regulator SCA were unanswered when contacted by The National.

"They tell me: 'What can we do for you? We gave you a window but you didn't sell,'" he says. "Now I have nowhere to even sell the shares on the OTC [over the counter]. I can't sell through a broker, I can't have the trade registered through a registrar. We, as minority shareholders, are stuck." DIB made an offer to shareholders of Tamweel back in January 2013, a share swap transaction whereby they would surrender their shares for new shares in the Dubai lender. DIB had 58.2 per cent ownership in Tamweel at the time. The consulting firm PwC was appointed to determine the fair value for the swap, which was set at Dh2.25 for DIB and Dh1.25 for Tamweel, respectively.

In March 2013, the Dubai lender said it planned for a 100 per cent ownership of Tamweel.

Mr Ibrahim says he did not turn in his shares because he was looking for a better price. He said there are other day traders that had not turned in shares because either they did not receive a notice letter from Tamweel, they were outside the country, or a lack of liquidity in the market prevented them from offloading their full shareholding. In the meantime, Tamweel's stock continued to trade until it delisted on October 1, 2013.

Those who hold shares of Tamweel today comprise about 14 per cent, consisting of retail and corporate investors.

"Some people decided against selling the shares at the time because they were unhappy with the price," said Wadah al Taha, the chief investment officer at the Dubai-based Al Zarooni Group. "But now they are desperate and really suffering with no other legal recourse."

The National