Dubai’s Drake and Scull shareholders decide not to dissolve the company

Dubai contractor Drake and Scull International (DSI) will continue operating despite posting heavy losses, its shareholders decided during a board meeting on Thursday, the company revealed in a bourse statement.

Shareholders of the Dubai-listed company had to take a resolution on whether to dissolve the company before the expiry of its term since its accumulated losses exceeded 50 per cent of the issued share capital – a requirement under the UAE Companies Law.

The contractor, which posted a second-quarter net loss of Dhs181.1m ($49.3m), had called for a general assembly on September 27, but had to postpone the meeting after the quorum was not met.

“The general assembly approved by majority to continue carrying out the activity of the company,” the statement said.

“The shareholders were informed by the board on the current situation of the company and its future plans along with the developments in the investigation conducted by the new management with regards to the previous executive management,” it added.

No further details about the investigation were revealed.

Earlier this year, it was reported by Bloomberg that the former CEO of DSI Khaldoun Al Tabari and his daughter owed the company up to Dhs1bn ($272.3m).

DSI also issued a bourse statement confirming the “existence of material financial violations from the previous management”.

It said the violations are under investigation by UAE authorities.

However, Tabari  strongly refuted the claims, and warned of legal action against those spreading “unfounded allegations”.

Also read: Ex-CEO of UAE’s Drake and Scull denies wrongdoing, warns of legal action

Drake & Scull has been hit by a slowdown in the regional construction sector over the past few years.

In a bid to turn around operations, the company appointed a new CEO of the group and its subsidiaries in August – its second executive in less than five months.

Read more: Dubai’s Drake and Scull replaces CEO, blames ‘rumours’ for share price drop

Its biggest shareholder is Ajman Bank with 13.06 per cent, according to stock exchange data. Other shareholders include local private equity firm Tabarak Investment and local businessman Adel Abdulhamed Ibrahim al-Hosani, according to Thomson Reuters data.