Financial Regulatory Forum

By Rania Oteify

DUBAI, Dec 31 (Reuters) – Corruption at Dubai’s state-linked companies is unusually high, the Gulf Arab emirate’s police chief said on Thursday, but tough new penalties introduced this week could help curb fraud.

Dubai, which shocked global markets in November with a request to delay $26 billion in debts linked to flagship firm Dubai World, has ramped up an anti-corruption drive in recent weeks.

The emirate has seen a series of high-profile fraud cases since 2008 involving top executives at government-related firms like property developers Nakheel and Dubai Properties, as well as Dubai Islamic Bank.

“Something is unusual. We have never had such a high number of people involved in corruption,” Dhahi Khalfan Tamim, who also heads the Dubai government’s budget committee, told Reuters.

A law issued on Tuesday has the power to impose prison terms of up to 20 years on offenders as the emirate tightens financial rules in the wake of its debt crisis.

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.