One more independent newspaper falls to government control
Dubai Govt Takes 30% Stake In Galadari Bros - Sources
By Simeon Kerr and Sarmad Khan
OF DOW JONES NEWSWIRES
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DUBAI (Zawya Dow Jones)--The Dubai government has
taken a 30% stake in one of Dubai's oldest
family-owned conglomerates, Galadari Brothers Co.,
according to a document seen by Zawya Dow Jones.
A memo dated Oct. 5 says that a decree from a
judicial court appointed by Dubai's ruler, Sheikh
Mohammed bin Rashid Al Maktoum, has restructured the
shareholding of Galadari Group of Companies, which
includes the English-language Khaleej Times newspaper,
an auto dealership, three hotels and the franchise for
Baskin Robbins ice cream.
The memo says the existing board has been
dissolved, and replaced by three temporary members,
one of whom is the existing chairman of Galadari
Brothers and the Khaleej Times' editor-in-chief,
Mohammed Abdulrahim Galadari.
The memo, which was sent to the managers of 11
Galadari companies, was signed by Sharif Khoory and
Yahya Kazi. It also says Khoory and Kazi have been
appointed as directors of the executive board of
Galadari Brothers.
Several people familiar with the move confirmed
the memo's authenticity. Zawya Dow Jones' calls to
Galadari's new representatives and representatives of
the Dubai government weren't returned.
People aware of the matter say the government's
30% stake replaces Galadari's debt to the government
and other Dubai royal-family owned companies.
The 28-year-old Khaleej Times, one of the
Mideast's most established newspapers, is expected to
undergo changes, said people familiar with the matter.
Although Mohammed Galadari remains on the interim
board, people aware of the issue say the government
stake will effectively sideline his decision-making
power in the companies, including at the newspaper,
which runs under the strapline "The Truth Must Be
Told."
The observers say that the editorial stance and
quality of the daily, one of the few local newspapers
to write critical articles on Dubai, raised government
hackles.
"This board will perform its duties during the
interim period, that is, until the formalities of
including the Government of Dubai or any of its
nominated Companies joining the Galadari Group with a
shareholding of 30%, is completed," the memo said,
adding that members of the Dubai government will also
be represented on the new board.
People familiar with the matter said that the
interim period will last for three months, during
which due diligence will be carried out.
Dubai Holding, a company owned by Sheikh Mohammed,
has interests across the economic spectrum. One of its
firms, Arab Media Group, owns English and Arabic radio
stations and newspapers in the emirate, including
Emirates Today, a compact competitor to the broadsheet
Khaleej Times.
Galadari Brothers, founded by the late Abdulwahab
Galadari in 1969, went bankrupt in the mid-1980s, at
which point the huge conglomerate was split between
the sons.
Another firm, Ilyas & Mustafa Galadari, which is
developing a city within Dubai's leisure Dubailand
project, grew out of the family schism and isn't
subject this shareholder change.
By Simeon Kerr, Dow Jones Newswires,