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01 December 2023

Arabtec CEO acknowledges oversight

Arabtec Construction L.L.C. CEO Riad Kamal. (FILE)

By Reuters

UAE builder Arabtec's chief executive said on Wednesday the trading ban imposed on him by the country's regulator was due to his oversight in selling shares prior to the announcement of projects.

Riad Kamal on Wednesday told Reuters he respects the regulator's move.

Shares of Arabtec, the Gulf Arab state's largest builder by market value, dropped 2 per cent in Dubai at 0740 GMT (11.40am UAE time) on reports of the ban.

The UAE’s regulator suspended Kamal from trading in person or in any other capacity in the country's bourses for six months on Tuesday.

Kamal said he received a circular, which was distributed through the Abu Dhabi Securities Exchange.

"I respect the decision of the regulator. One should not deal before any news, whether it is buying or selling. That was an oversight by me," Kamal told Reuters.

However, he denied market rumors that the suspension related to share trading during a period in late 2009 and early 2010 when Arabtec was considering a tie-up with Abu Dhabi fund, Aabar Investments. That deal was called off in April 2010.

"It has nothing to do with that (Aabar deal)," he said.

A spokesman for the Abu Dhabi Securities Exchange said Kamal was suspended for "possible violations" of securities law, adding that the circular was issued by UAE market regulator Securities and Commodities Authority (SCA).

A SCA spokesman declined to comment when contacted by Reuters.

Kamal confirmed that the regulator had sent him questions about personal transactions in 2009, which he had answered.

The move by the Securities and Commodities Authority (SCA) to clamp down on such trading will be seen as a positive by the markets, an analyst said.

"Markets like good governance. It welcomes foreign investors as well. If the regulator is seen moving towards setting an even playing field, it is a positive," said Robert McKinnon, ASAS Capital's chief investment officer.