One of Dubai Mercantile Exchange's (DME) minority shareholders may lose its membership due to its "past and present conduct" and "corporate make-up".
According to court papers seen by Emirates Business, DME has terminated Casa Trading's off-floor membership due to the discovery of its previous and current practices, which makes it ineligible to continue the membership. The Illinois-based firm's application for floor membership filed on December 18, 2008, was also denied for the same reason.
Casa Trading became a DME off-floor member in December 2007. Off-floor members have no physical presence in the Dubai International Financial Centre (DIFC) and trade from any jurisdiction in the world outside the DIFC, which is acceptable to the Dubai Financial Services Authority (DFSA), according to law firm Clyde & Co.
Then in August 2008, Casa Trading became one of the companies that took minority stakes in the exchange along with Goldman Sachs Group, Morgan Stanley, Royal Dutch Shell, Vitol and Concord Energy.
Three months thereafter it filed an application for floor membership, which requires an entity or a branch office in the DIFC.
It was in the course of processing the application that DME discovered Casa's "past and present conduct and corporate make-up was such as to render it ineligible for either new membership or to continue to the existing off-floor memberships," said a claim form filed by Thomas Leaver, CEO, DME, in DIFC Courts.
Casa has disputed the termination and the refusal to grant membership. Dispute resolution efforts are on. "DME can confirm that it is in dispute resolution proceedings with Casa Trading," a spokesperson said.