Dubai mortgage lender Tamweel's former chief executive and head of investments are under investigation for alleged wrongdoing, their current Dubai employer said on Thursday. Tamweel shares fell almost 6 percent on Thursday after media reports that former CEO Adel Al-Shirawi was questioned by Dubai police over what the reports said were alleged financial irregularities while he was employed by Tamweel. “Istithmar World acknowledges reports that Adel Al-Shirawi and Feras Kalthoum are being questioned on certain alleged charges related to their previous positions at another company,” Istithmar World said in a statement e-mailed to Reuters. Kalthoum is Istithmar World's group chief financial officer. “Istithmar World is not under any investigation,” it said. Major General Khamis Mattar Al-Mazeina, acting chief of Dubai police, declined to comment when contacted by Reuters. Shirawi, who stepped down as Tamweel CEO in January, is now vice chairman of Istithmar World, a unit of state-owned Dubai World. Shirawi and Kalthoum could not be reached for comment. Istithmar World is the largest shareholder in Tamweel with a 21.6 percent stake. Kalthoum was head of investments at Tamweel, the largest mortgage provider in the United Arab Emirates by market value, and Shirawi is still a member of its board. The Tamweel probe is the latest investigation by Dubai police into alleged financial irregularities involving companies based in Middle East business and trade hub Dubai and affiliated with Dubai Islamic Bank, the UAE's largest Islamic bank by market value. Former employees of Dubai Islamic, which owns a stake in Tamweel, and its affiliate Deyaar Development, have come under investigation in recent months by Dubai police and the public prosecutor's office, although none of the cases have led to any trials. Istithmar is one of the investment agencies set up by Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum to invest the emirate's wealth abroad. The Tamweel investigation could continue to have a negative impact on its share price, which has fallen more than 20 percent this month on rumors of an investigation into Tamweel, analysts said. “It may be more expensive for Tamweel to raise financing while there is an ongoing investigation,” said Raj Madha, an analyst at investment bank EFG-Hermes. “That could have an impact on its ability to expand its mortgage business.” “You would expect this to have an impact on the share price because of the impact on its financing costs and because it raises uncertainty,” he said. In July, Tamweel said it sold 1.1 billion dirhams ($299.5 million) of Islamic bonds. “In reference to recent media reports related to an alleged investigation conducted by the public prosecution in Dubai of the former CEO and member of the board of directors of Tamweel as well as a former senior executive of the company, Tamweel reiterates that to date it has received no formal notification of such an investigation from the relevant authorities,” it said in a statement posted on the bourse website on Thursday.
