While the UAE federal government does have anti-corruption laws applicable to the entire country, the Abu Dhabi government in particular has taken steps to ensure compliance in corporate governance, according to an industry expert.
“The Abu Dhabi Accountability Authority (ADAA) makes sure that that public sector companies implement measures for prevention, detection and response to fraud and corruption,” said Tania Fabiani, Partner-Business Resilience, at PricewaterhouseCoopers (PwC) UAE.
The emirate has instructed companies to spend heavily on fraud risk assessment programmes and policy implementation, she said, on the sidelines of the ICAEW/DFSA business briefing on the detection of fraud.
“The ADAA also goes back and audits those companies to make sure that they are complying with the measures,” claimed Fabiani, who earlier worked with the authority.
“In Dubai, the main concern is that the financial audit is still very focused on the reactive and investigations [work]. The fraud risk management or corruption risk management is not in place, but I see that they are making attempts,” she said.
“I think Abu Dhabi is leading the standards, and I think other emirates have to follow,” Fabiani added.
Meanwhile the Dubai Financial Services Authority (DFSA) said that it had it had enforced many new measures for fraud and risk management.
“The laws have changed and now we have an oversight of both the [external] auditors and the firms in the Dubai International Financial Center (DIFC),” said Paul Koster, the CEO of DFSA. All the firms are expected to have compliance officers, risk assessment manuals and strictly adhere to the guidelines issued by the regulator.
He also said that violators were subject to strict punishments, in line with international standards.
The issue of transparency was raised in Abu Dhabi last month. Unusual trading patterns in the stocks of property developers Aldar and Sorouh, when they announced a possible merger, led to a newspaper report saying that the case was being investigated by the ADX. However, the CEO of the Abu Dhabi Securities Exchange was quick to deny all reports of a trade inquiry, saying that they found no violations.
Another senior official from the Abu Dhabi Chamber of Commerce and Industry (ADCCI) told Gulf Business at the time that the two companies were carrying on proceedings in line with corporate governance.
“In the case of Aldar and Sorouh, I think it [the dealing] was properly done,” said Khalfan Saeed Al Kaabi, first vice chairman and head of Economic Committee at ADCCI. “I think there was enough transparency,” he added.