Promoters of companies that go public and seek listings on the UAE's stock markets could soon be allowed to hold on to a higher proportion of the shares than at present, a senior official has revealed.
Currently the original owners can retain no more than 45 per cent of the shares, and the rest have to be offered to the public. But proposed changes to the company law will allow them keep up to to 70 per cent, said Maryam Suwaidi, Executive Vice-President for Legal Affairs at the Securities and Commodities Authority (SCA).
"Companies listed on the financial markets are public joint stock companies," she said. "Federal Law Number Eight of 1984, which covers commercial companies, commits those companies to issuing not less than 55 per cent of the capital in a public offering, so the founders are left with not more than 45 per cent and not less than 20 per cent of the capital of the company. But this ratio has not stimulated the conversion of family-owned companies to public ownership."
Suwaidi said the legislation covering UAE companies was intended to encourage families to convert their businesses to public joint stock companies and enrich the state's financial markets.
"The new company law will give all founders of public shareholding companies, whether family or non-family ones, the right to hold on to not less than 30 per cent and not more than 70 per cent. The rest will be put into the public offering."
SCA in Deal with ADCCG
The Securities and Commodities Authority (SCA) has signed a memorandum of understanding with the Abu Dhabi Centre for Corporate Governance (ADCCG), an affiliate of the Abu Dhabi Chamber of Commerce and Industry (ADCCI), to boost the framework of co-operation between them to spread awareness on the principles of corporate governance, its application and significance to the business sector. (Wam)
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