Financial Regulatory Forum

Dubai takes new steps to clamp down on corruption

By Reuters Staff
December 30, 2009

DUBAI, Dec 29 (Reuters) – Dubai’s ruler announced a new law to combat corruption, with the power to impose prison terms of up to 20 years on offenders as the emirate tightens financial rules in the wake of a debt crisis.

The law “comes in line with Dubai’s ongoing efforts to eradicate all forms of fraud,” according to a statement from Sheikh Mohammed bin Rashid Al Maktoum’s office on Tuesday.

It is the latest in several measures taken by the government in the wake of a debt bombshell on Nov. 25 when the Gulf Arab business hub said it wanted to delay repayment of $26 billion owed by its flagship company, Dubai World.

Dubai, one of seven emirates in the United Arab Emirates, has been on an anti-corruption drive since 2008 after a series of high-profile fraud cases involving top-level officials at listed firms, including Islamic lender Tamweel and Dubai Islamic Bank.

The decree will aim to protect Dubai’s “economic interests and preserve financial rights of individuals,” the decree said.

Under the law, those convicted face up to 20 years in prison though they can also be set free upon repayment of any stolen funds, or settlement agreements, the statement said.

The law, which takes effect immediately, “facilitates the redemption of funds fraudulently seized by persons from either public or private money.”

Earlier on Tuesday, Dubai said it hired foreign consultants to attract more investments after its reputation was hit following the shock debt standstill announcement.

An 11th hour life-line from neighbouring emirate Abu Dhabi on Dec. 14 helped Dubai World avert a $4.1-billion default on an Islamic bond issued by property arm, Nakheel.

(Reporting by Tamara Walid; Editing by Rupert Winchester) ((tamara.walid@thomsonreuters.com; +971 4 391 8301; Reuters Messaging: tamara.walid.thomsonreuters.com@reuters.net))

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •