Deloitte: Family-owned businesses make up largest sector of GCC economy

Updated 30 June 2014
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Deloitte: Family-owned businesses make up largest sector of GCC economy

Around 80 percent of nonoil GDP within the Middle East region is accounted for by family-owned business groups. Typically, these privately-owned organizations span multiple business, are vertically integrated, own sizable real estate portfolios and their operational control is still maintained by the original founding family member or the second generation.
For many families in business, the rapid pace of change and growth in the marketplace presents significant concerns regarding the manner in which they will continue to safeguard and preserve their heritage and wealth.
Family-owned businesses in the Middle East face a range of challenges that affect not only the success of the business itself, but also the professional and personal goals of their owners and their stakeholders at large.
Walid S. Chiniara, an international lawyer with over 30 years’ experience across the five continents and a leading family business adviser, has joined Deloitte as the partner in charge of its Private Client Services practice (PCS) across the Middle East.
PCS is a private client-focused practice, that brings in Deloitte’s multi-disciplinary professionals to offer families in business and next generation family business entrepreneurs in the GCC and the MENA region bespoke and region-specific solutions in the area of family governance, succession planning and generational change, wealth management, tax structures and exit strategies.
“This is an exciting time for the Deloitte family and I am pleased that Walid Chiniara, one of the most experienced Family Office Advisers in the Middle East, is joining the firm to lead the Private Client Service (PCS) unit,” said Omar Fahoum, chairman and chief executive at Deloitte Middle East.
Deloitte recently conducted a survey on family-owned businesses to assess two specific areas that have an impact on their companies’ operations and growth: governance and succession.
The findings of the survey based on the input of 222 survey respondents indicate gaps in governance, board operations, and succession planning.
Other key findings of the survey include:
Nearly half (49 percent) of respondents say they only review succession plans when a change in management requires it and 41 percent do not have leadership contingency plans.
More than 80 percent of respondents say their boards have no term or age limits on membership and one-third do not evaluate board members’ performance.
Deloitte believes that the needs of families in business are different from those of public corporations. Therefore, Deloitte Middle East’s Private Client Services offering is continuously adapting to ensure that it addresses all facets of a family’s wealth, including its human, intellectual, cultural, and financial capital.
Nauman Ahmed, regional tax leader at Deloitte Middle East, comments: “The aim of the PCS division is to provide business families with the tools they need to preserve and grow their wealth — both now and for generations to come. The appointment of Walid, with his extensive experience working closely with families in business, will further support our ability to better serve our clients and build on the technical capability that Deloitte is renowned for”.


Audi CEO detained in diesel emissions case

Updated 25 min 13 sec ago
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Audi CEO detained in diesel emissions case

BERLIN: German authorities on Monday detained the chief executive of Volkswagen’s Audi division, Rupert Stadler, as part of a probe into manipulation of emissions controls.
The move follows a search last week of Stadler’s private residence, ordered by Munich prosecutors investigating the manager on suspicion of fraud and indirect improprieties with documents.
“Audi CEO Rupert Stadler was provisionally arrested this morning,” the company said in a statement. It said shortly afterward that a judge had ordered him kept in custody pending possible charges at prosecutors’ request.
The company said that it couldn’t comment further due to the ongoing investigation, but stressed that “the presumption of innocence remains in place for Mr. Stadler.”
German news agency dpa reported that prosecutors decided to seek Stadler’s arrest due to fears he might try to evade justice. A former head of Audi’s engine development unit is already in investigative detention.
A total of 20 people are under suspicion in the Audi probe, which focuses on cars sold in Europe that were believed to be equipped with software which turned emissions controls off during regular driving.
Volkswagen has pleaded guilty to criminal charges in the United States and nine managers, including former CEO Martin Winterkorn, were charged there. Two are serving prison terms; Winterkorn and the others remained in Germany and are unlikely to be extradited.
Audi said in a statement last week that it was “cooperating with the authorities” in the probe.
Volkswagen shares were down 2.1 percent at 157.66 euros in Frankfurt trading.