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Rather than face reality, Dubai tells S&P to ‘get stuffed’

January 29th, 2010

Construction slows in Dubai, image courtesy of The Guardian

If you don’t like the messenger, shoot him. This seems to the be the approach favoured by Dubai, the bling-obsessed emirate in the gulf.

Dubai’s ruling family, the al-Makthoums, are so in love with opacity  — particularly when it comes to fudging the line between public and private sector ownership of troubled assets — they can no longer stand the ratings agency Standard & Poor’s. Indeed, they have as good as banished it from the emirate simply for having the temerity to seek more clarity on such matters.

Unhappy with S&P’s quest for greater transparency, Emirates NBD, one of the Gulf’s largest lenders, yesterday decided it had had enough, and sacked the agency. The move followed S&P’s earlier announcement it would no longer be monitoring the creditworthiness of Dubai Holding Commercial Operations Group, the commercial arm of Dubai Holding, which oversees the property and business parks empires of Sheikh Mohammed bin Rashid al-Maktoum. The reason given by the US-based ratings agency was that the conglomerate’s disclosure was substandard.

Since November, S&P has issued a string of downgradings and comments calling for greater transparency from ‘Blingopolis’, particularly in the run up to and immediately after Dubai World’s decision to partially renege on its $22bn debt mountain.

Short URL: http://www.ianfraser.org/?p=1019

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