Grant Thornton’s UAE chief has ringside seat to the Gulf’s transformation

Grant Thornton’s UAE chief has ringside seat to the Gulf’s transformation
Illustration by Luis Grañena
Updated 13 October 2018

Grant Thornton’s UAE chief has ringside seat to the Gulf’s transformation

Grant Thornton’s UAE chief has ringside seat to the Gulf’s transformation
  • As UAE head of Grant Thornton, Hisham Farouk has had a ringside seat to some radical regional changes
  • ‘The region has witnessed material changes to what were key attributes of the Gulf countries’

DUBAI: Grant Thornton is riding just outside the leading pack of the Big Four accounting and consulting giants and, talking to the chief of its UAE business, Hisham Farouk, that’s exactly how the firm likes it.
While the Big Four — PwC, Deloitte, Ernst & Young and KPMG — have been getting increasingly embroiled in battles with regulators over perceived conflicts of interest and other abuses of the auditing system, the 40-year-old Grant Thornton (GT) is happy to leave them to it. In a calculated move, GT recently decided not to bid for any more audit contracts from the biggest firms in its native UK.
Farouk, born in Dubai but of Egyptian heritage, recently became the first Arab to hold a seat on GT’s global board of governors.
“We believe the expectation gap of what is expected by an audit firm and (where) our contractual, market and fiducial responsibilities lie has widened given the economic disparity across the world,” he said. “It is critical that professional service firms and regulators work hand-in-hand to define and agree what the new world-class requirements are and support the changes we are witnessing to create the new norm of economic balance, transparency and regulatory oversight.”
Nowhere is that “new norm of economic balance” more evident than in the Middle East, where GT has a growing business, from its base in the UAE but spreading increasingly to Saudi Arabia and Egypt, the three biggest economies in the region.
“The region is experiencing a very transformational time. The past few years have reshaped the economic and geopolitical landscape significantly. With the oil price recession ... and a significant shift of economic oil dependency, the region has witnessed material changes to what were key attributes of (the) ethos of Gulf countries,” Farouk said.
Such transformations include the removal of subsidies on energy, reviews of benefits structures in the public sector, the introduction of sales taxes, and a shift toward economies less dependent on oil and government spending.
“This has all created the volatility we have experienced over the past few years. GT is very excited about this transitional phase as we experience what the new norm will be like,” Farouk said.


Illustration by Luis Grañena

Illustration by Luis Grañena


Farouk has in the past underlined the potential for the UAE of the approaching Expo 2020 extravaganza. While some commentators think the economic “boom” associated with the Expo has been slow to have an impact, he thinks the real effect is still to come.
“You can surely see Dubai emerging into what it will be with the Museum of the Future, all the real estate developments like Dubai South and Dubai World Central airport. While we may have not witnessed the strength of the public relations effect of Expo yet, I suspect 2019 will be that year. Many expected the benefit to have been in the run-up years, yet we believe that Expo will be showcasing Dubai and the UAE to the world. It will attract a new caliber of companies and people and mark a new dawn for the nation’s presence in the global arena,” Farouk said.
His native Egypt will also benefit from the regional “feel-good factor” of Expo, Farouk thinks. “Watch and discover every opportunity Egypt has yet to offer. It is indeed not only a gateway to 100 million people, but an access point to Africa and the greater region,” he said.
GT has had a presence in Saudi Arabia for years, with offices in Riyadh, Jeddah and Alkhobar, working with corporates and with family offices — a mainstay of its business in the region — as well as being closely involved in one of the most high-profile business situations the Kingdom has experienced: The long-running standoff between the Al-Gosaibi family and entrepreneur Maan Al-Sanea.

The involvement in Saudi Arabia has given Farouk a ringside seat to the great transformation under way in the Kingdom. “Over the past two years, Saudi Arabia is undergoing a very radical pace of change relative to what the world has witnessed before from it. These changes are impacting the fundamentals of its social, economic and political fabric. None of this can be easy and we expect both challenges to be faced there, as well as opportunities,” he said.
Farouk believes that while there is still caution on the part of international investors considering involvement in the Vision 2030 transformation strategy, the fundamentals of the Saudi proposition will prove decisive in the long term.

“We have heard from the media that there is caution still and this is expected as the changes are major and you would expect some social and economic volatility from them. The fundamentals of Saudi Arabia still don’t change, given its population — which is characterized with relatively one of the largest youth populations — and the magnitude of the percentage of global oil production it controls. Globally, emerging markets have not had a strong year and this naturally reflects on Saudi Arabia as well,” he said.
Farouk believes that, with the right focus and leadership, the Vision 2030 goals are eminently achievable. “It will take a concerted effort from all stakeholders, including the public, and yes, I believe anything is achievable if there a sincere alignment between all parties involved. We have seen radical changes take place in Estonia, Rwanda, Singapore and Dubai, so anything is possible if there is clear focus and directive that benefits and prospers the people of the nation.”
Family offices — one of the great investment pools of capital in the Arab world — have traditionally been a focus for GT, and that will continue, even as regional economies are modernizing and their stock markets advertise the attractions of initial public offerings as a way to bring traditional businesses into the 21st century.
“Family offices are living through the changing times and many of them are pivoting to new sectors and services. It’s a critical time as they adjust to the new norm of the economy and market. IPOs have been in the forefront for many of them, and while market confidence is needed to revive capital markets in the region, it is important for many family offices to experience this transitional change prior to being ready for public offering and scrutiny,” Farouk said.
In any case, he believes, people are more important than stock markets or IPOs. “We must appreciate and take care of our people and be aligned with the visions and dreams of our clients. That is our true role in society. I am privileged to lead a team of highly proficient, sincere professionals that want to support the ever-changing world and work closely with our clients to fulfill their ambitions,” Farouk said.
“There are many discussions on how technology will change the face of this earth, but I am a true believer that it is people who create the future.”


First Abu Dhabi Bank completes Bank Audi Egypt takeover

First Abu Dhabi Bank has gained legal and regulatory approval to complete the acquisition of a 100 percent stake in Bank Audi Egypt. (Reuters/File Photo)
First Abu Dhabi Bank has gained legal and regulatory approval to complete the acquisition of a 100 percent stake in Bank Audi Egypt. (Reuters/File Photo)
Updated 22 April 2021

First Abu Dhabi Bank completes Bank Audi Egypt takeover

First Abu Dhabi Bank has gained legal and regulatory approval to complete the acquisition of a 100 percent stake in Bank Audi Egypt. (Reuters/File Photo)
  • Following the transfer of shares, the acquisition will make First Abu Dhabi Bank one of the largest international banks operating in Egypt

CAIRO: First Abu Dhabi Bank has gained legal and regulatory approval to complete the acquisition of a 100 percent stake in Bank Audi Egypt, a subsidiary of the Lebanese Bank Audi Group, the bank announced on Thursday.

In a statement, the bank said that after the completion of the share transfer process, First Abu Dhabi Bank will begin merging the assets and operations of Bank Audi Egypt and First Abu Dhabi Bank — Egypt, with the merger process expected to be completed in 2022.

Following the transfer of shares, the acquisition will make First Abu Dhabi Bank one of the largest international banks operating in Egypt, with assets exceeding EGP 130 billion ($8.5 billion) after consolidating on Dec. 31, 2020.

“This step represents a strategic achievement that supports First Abu Dhabi Bank’s development aspirations at the international level and will accelerate the expansion of its business in one of the most important markets with high growth potential. This acquisition will play an essential role to enhance the volume and momentum of First Abu Dhabi Bank’s business in Egypt,” Hana Al-Rostamani, CEO of First Abu Dhabi Bank Group, said in a statement.

The banking services Bank Audi Egypt provides to individuals and companies through its wide network of branches will support the operations of First Abu Dhabi Bank in Egypt, which has operated in Egypt since 1975.

Mohamed Abbas Fayed has been appointed CEO of the combined entity. He joined First Abu Dhabi Bank in 2019 and was previously CEO and managing director of Bank Audi Egypt, which helped him gain extensive experience over three decades in the sector and in the Egyptian market.


Saudi Arabia sees 110% rise in flight searches in March

Saudi Arabia sees 110% rise in flight searches in March
Updated 22 April 2021

Saudi Arabia sees 110% rise in flight searches in March

Saudi Arabia sees 110% rise in flight searches in March
  • The Skyscanner data showed that domestic flights within Saudi Arabia were the most searched for last month

RIYADH: Saudi Arabia recorded a 110 percent month-on-month surge in people searching for flights in March, according to global online travel platform Skyscanner, as the Kingdom’s travelers get ready for international flights to reopen from May 17.
The Skyscanner data showed that domestic flights within Saudi Arabia were the most searched for last month, followed by international destinations in India, Pakistan, the Philippines and Egypt.
Flights were grounded in the Kingdom in March 2020. Domestic traffic resumed at the end of May 2020 and the Saudi General Authority of Civil Aviation (GACA) recently announced that international flights will resume by May 17, 2021.
In a bit to capitalize on this, Skyscanner has launched an Arabic language version of its platform on desktop and mobile web.
“We’re pleased to be able to offer travelers in the Middle East a far more relevant experience on desktop, allowing them to plan and book travel in their local language and currency,” Gavin Harris, director of strategic partnerships, Skyscanner, said in a press statement.
“Arabic is one of the 5th most spoken languages in the world and outbound travel from Saudi Arabia and the UAE accounts for a significant proportion of the total travel market,” he added.
In December, the “Global Holiday Intent” survey, conducted by YouGov on behalf of Reed Travel Exhibitions — organizer of the Arabian Travel Market (ATM) exhibition in Dubai — found that 46 percent of those surveyed in Saudi Arabia said that they intended to travel internationally once restrictions were lifted.
Additional research released this week by global travel services company Collinson found that more than four fifths of business travelers in Saudi Arabia had seen their job affected in some way by a lack of cross-border business travel, and about one third of survey respondents said that they felt unable to do their job effectively.


Evergrow signs $400m loan to restructure debts

Evergrow signs $400m loan to restructure debts
Updated 22 April 2021

Evergrow signs $400m loan to restructure debts

Evergrow signs $400m loan to restructure debts
  • $74 million of loan will finance construction of fertilizer plant in Sadat City
  • Mashreq Bank and National Bank of Egypt led 12-bank syndicate

RIYADH: Egyptian fertilizer company Evergrow has signed a $400 million loan agreement with a syndicate of 12 banks led by Mashreq Bank and the National Bank of Egypt (NBE), who acted as the facility arrangers, Asharq reported citing a joint statement on Wednesday.

The plan consists of $326 million that will be used to restructure previous debts Evergrow owes to the same banks, while the remaining $74 million will finance the construction of the third phase of the company’s fertilizer plant in Sadat City, slated for completion within nine months.

The financing is one of the largest dollar loans granted by banks to private sector companies in the Egyptian market in the field of potassium fertilizers during the past 10 years.

The deal is part of Evergrow’s financial reform program sponsored by the Central Bank of Egypt.

The new funds will help raise the annual production capacity of all the company’s products from 817,000 tons currently to 1.15 million tons annually, said Evergrow Chairman Mohamed El Kheshen.

Egypt’s Minister of Trade and Industry Neveen Gamea in March said that Egypt aims to increase its exports — especially to EU, African and Arab markets — to $100 billion, through the implementation of a strategic plan.


Turkish crypto founder flees with reported $2bn

Turkish crypto founder flees with reported $2bn
Updated 22 April 2021

Turkish crypto founder flees with reported $2bn

Turkish crypto founder flees with reported $2bn
  • Launched aggressive campaigns to lure investors
  • Founder reported to have flown to either Albania or Thailand
ISTANBUL: Turkish prosecutors on Thursday opened an investigation after the Istanbul-based founder of a cryptocurrency exchange shut down his site and fled the country with a reported $2 billion in investors’ assets.
The Thodex website went dark after posting a mysterious message saying it was suspending trading for five days on Wednesday because of an unspecified outside investment.
Turkish security officials then released a photo of Thodex founder Faruk Fatih Ozer going through passport control at Istanbul airport on his way to an unspecified location.
Local media reports said Ozer — reported to be either 27 or 28 years old — had flown either to Albania or Thailand.
HaberTurk and other media said Thodex shut down after running a promotional campaign that sold Dogecoins at a big rebate — but did not allow investors to sell.
Reports said the website and the entire exchange had shut down while holding at least $2 billion from 391,000 investors.
“The victims are panicked,” investors’ lawyer Oguz Evren Kilic was quoted as saying by HaberTurk.
“They are lodging complaints at prosecutors’ offices in the cities they reside.”
Prosecutors launched an investigation into the businessman on charges of “aggravated fraud and founding a criminal organization,” the private DHA news agency said.
Thodex has launched aggressive campaigns to lure investors.
It had first pledged to distribute luxury cars through a flashy advertising campaign featuring famous Turkish models.
The platform then launched its Dogecoin drive.
The cryptocurrency is getting particularly popular among Turks who are looking to preserve their saving in the middle of a sharp decline in the value of the local lira.
The Turkish crypto market remains unregulated despite growing skepticism from President Recep Tayyip Erdogan’s government about the safety and use of digital currencies.
The Turkish central bank has decided to ban the use of crypto currencies in payments for goods and services starting from April 30.
It warned that cryptos “entail significant risks” because the market is volatile and lacks oversight.
“Wallets can be stolen or used unlawfully without the authorization of their holders,” the central banks warned last week.

Riyadh property prices rise 2% in Q1 even as rents fall

Riyadh property prices rise 2% in Q1 even as rents fall
Updated 22 April 2021

Riyadh property prices rise 2% in Q1 even as rents fall

Riyadh property prices rise 2% in Q1 even as rents fall
  • Mortgages rise, underpinning demand
  • Office sector remains under pandemic pressure

RIYADH: Property prices in the Saudi capital edged higher in the first quarter even as rental rates eased, JLL said.
Riyadh’s residential sale prices registered an annual increase of 2 percent for apartments and villas. By contrast, rental rates reported yearly declines of 1 percent for apartments and villas, it said. Some 7,700 homes were handed over during the period, the broker said.
“Looking ahead, the government initiatives that are pushing Riyadh to be the business hub of the region are expected to spur local and international demand,” JLL said in the report.
It said that strong government support helped to boost demand for residential property in the first three months of the year.
New mortgage loans for individuals jumped by 33,000 contracts in January 2021, it said.
The total value of mortgages increased to SR16.4 billion, according to the Saudi Arabia Monetary Agency (SAMA).
The Riyadh office market remains under pressure with average lease rates across a basket of Grade A & B office spaces in the city falling by 2 percent over the quarter compared to a year earlier.