Dubai issues new financial center insolvency law after Abraaj collapse

Dubai International Financial Center (DIFC) is the largest financial hub in the Middle East, Africa and South Asia. (Courtesy of DIFC)
Updated 11 June 2019
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Dubai issues new financial center insolvency law after Abraaj collapse

  • New procedures in line with global best practices introduced as a first for the region
  • The new Insolvency Law and Regulations will come into effect on Aug. 28, 2019

DUBAI: Dubai’s ruler Sheikh Mohammed bin Rashid Al-Maktoum issued a new insolvency law on Tuesday for companies operating in the Dubai International Financial Center (DIFC), the largest financial hub in the Middle East, Africa and South Asia.
The new law, due to come into effect in August, has been issued following the collapse of Dubai-based private equity firm Abraaj, which had a DIFC-regulated entity Abraaj Capital.
The firm that had been the Middle East and North Africa’s biggest buyout fund unraveled after a row with some investors over the use of money in a $1 billion health care fund.
The new law introduces a “new debtor in possession bankruptcy regime” for debtors that have filed for bankruptcy but still hold assets, according to a statement on the Dubai’s ruler official website.
Abraaj, its founder Arif Naqvi and a former executive are being investigated by the US Securities and Exchange Commission (SEC) on US charges that they defrauded investors, including the Bill & Melinda Gates Foundation.
The Dubai Financial Services Authority (DFSA) said in April it was in touch with the SEC and had been investigating Abraaj Capital Ltd, an entity of the collapsed firm, over a range of matters but has not specified what they are.


Singapore luxury apartment sales surge to 11-year high

Updated 20 September 2019

Singapore luxury apartment sales surge to 11-year high

  • Sales of such apartments also exceeded the numbers racked up for each full year from 2011 to 2018, the consultants’ analysis of transaction data shows

SINGAPORE: Sales of Singapore apartments worth at least S$10 million ($7.3 million) have hit an 11-year high, fueled by increased demand from Chinese millionaires seeking safe-haven assets, say property consultants OrangeTee & Tie.

Investors have long viewed Singapore as an island of stability that attracts the super-rich from its less developed Southeast Asian neighbors, as well as multimillionaires from mainland China.

In the first eight months of 2019, 68 condominium units in the wealthy Asian city-state were sold for S$10 million and more, the highest tally since the corresponding period of 2008.

Sales of such apartments also exceeded the numbers racked up for each full year from 2011 to 2018, the consultants’ analysis of transaction data shows.

Some buyers may have sought an alternative to rival financial hub Hong Kong, hit by protests, while others may have shifted funds from China after its yuan currency was devalued in a trade war with the US, an OrangeTee expert said.

“This may explain why we have observed more foreign buyers, especially mainland Chinese, coming into Singapore lately,” said Christine Sun, its head of research and consultancy.

Mainland Chinese are the biggest group of foreign buyers of Singapore luxury homes.

In Singapore’s prime districts, Chinese citizens bought 76 apartments worth more than S$5 million from January to August, versus 75 purchases by Singaporeans, data until Sept. 19 show.

Expensive apartments in premium neighborhoods are mainly bought by foreigners, because at such high prices Singaporeans have the option to buy landed property, such as bungalows and mansions.

Singapore does not allow foreigners to buy landed homes, except for those on the resort island of Sentosa.

“We do see that even though the stamp duties have increased .... we are still seeing people putting big money on these apartments, predominantly it is more for stability than anything else,” said Boon Hoe Leong, chief operating officer of high-end realtor List Sotheby’s International Realty.

He was referring to measures Singapore adopted last year to cool its real estate market, such as hiking additional stamp duties for foreign buyers to 20 percent from 15 percent.

“They are parking their money here — they know that the Sing dollar won’t depreciate overnight,” he added.