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The list of instances coming to light of some form of alleged wrong-doing within companies is getting longer, particularly after the Government’s publicised stance to bring any such perpetrators to justice and voicing its zero tolerance of such actions. This has been a major step forward in bringing corporate governance practices up to date as just “sidelining” people when they may have misbehaved is not always sufficient. The public awareness of who, how and when, together with appropriate punishment, is also very important as publicity and punishment on detection can act as a severe deterrent to others thinking of committing such acts. This therefore adds credibility to both the regulators and the companies under their rule. Companies must also be quick to keep markets informed when instances come to light. That is not to say, of course, that such acts will never again be committed, but confidence in the system that is seen to be working is incredibly important.
The “credit crunch” and the recent implosion of Lehman brothers after aborted talks with Barclays, the rescue of Merrill Lynch by Bank of America and the re-funding of AIG have sent jitters through stock markets and financial sectors around the globe. These, combined with the aforementioned alleged wrong-doings appear to have had a fairly dramatic impact on local stock markets as well, despite many comments that the UAE is insulated from these risks. This is unlikely to be entirely the case and the recently announced guarantees by the Federal Government is unquestionably as excellent move in providing reassurance to the local markets. Investors can be a fairly cautious group at times and one may wonder what else is still out there and is yet to reveal itself. All in all this may not be a good time for CEOs to be considering an IPO. Of course these low prices, when company fundamentals by and large remain strong, can attract courageous investors.
In this issue we are very pleased to have interviewed Michael Daly, the Managing Director of Bin Moosa & Daly Ltd (LLC). We have articles addressing protection of customer data and the value of the internal audit function. We also have our usual offshore and free zone updates.
Please feel free to write (update@pkfuae.com) if you would like to express an opinion on any matter inside.
GRAHAM MARTINS
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