Head of Dubai World threatens to take his money out of Europe
By David Prosser, Deputy Business EditorSaturday, 1 March 2008
The boss of Dubai World, the powerful sovereign wealth fund, has issued a thinly veiled warning to critics of the $2.5trn (£1.25trn) sector, threatening to take his money elsewhere if the European Union tried to regulate his activities.
Sultan Ahmed bin Sulayem, Dubai World's chairman, told the BBC's World at One programme yesterday that initiatives such as the proposed EU code of conduct for SWFs were "dangerous" for countries and companies in need of investment.
"If somebody comes with regulations that make it difficult for someone from certain geographical locations to invest in Europe or the West, people will take their investment somewhere else," he said. "I think it's dangerous when this money and liquidity is so badly needed – we are investors and we are free to go wherever we want. If you squeeze us, we will go elsewhere."
Mr bin Sulayem's comments follow calls from two European commissioners this week for better corporate governance standards and greater transparency from SWFs. Charlie McCreevy, the EU's internal market commissioner, and Joaquin Almunia, the EU's monetary affairs commissioner, said the funds did not make enough disclosures of key financial information and backed calls for a code of conduct for the sector.
The EU's concerns reflect similar anxieties voiced by a number of European and American politicians over the past 18 months, as SWFs have taken a greater number of large stakes in a range of different companies. Two years ago, Dubai World was forced to sell off the US ports owned by P&O when it bought the British company, amid American fears about key infrastructure coming under foreign ownership.
Yesterday, however, Mr bin Sulayem rejected calls for greater regulation of funds such as his, arguing that there had never been an example of an SWF buying up Western companies for political or strategic reasons, rather than on the basis of potential investment returns. "If you put a politician in charge of an investment, believe me, that investment fund will not last for a very long time," he said.
The Dubai World chairman's comments reflect growing anger among the leaders of SWFs at the attacks on their activities. At last month's World Econ-omic Forum in Davos, a string of SWF executives made similar warnings.
Bader al-Sa'ad, managing director of the Kuwait Investment Authority, said: "The KIA has been operating for 55 years and has never made a political decision – we look to the bottom line."
The EU's attempts to curb the power of SWFs are being led by the French and German governments, which have both been openly hostile towards the sector. The UK has offered limited support for calls for more transparency, though ministers have been at pains to make it clear they welcome SWF investment in British companies.
By David Prosser, Deputy Business EditorSaturday, 1 March 2008
The boss of Dubai World, the powerful sovereign wealth fund, has issued a thinly veiled warning to critics of the $2.5trn (£1.25trn) sector, threatening to take his money elsewhere if the European Union tried to regulate his activities.
Sultan Ahmed bin Sulayem, Dubai World's chairman, told the BBC's World at One programme yesterday that initiatives such as the proposed EU code of conduct for SWFs were "dangerous" for countries and companies in need of investment.
"If somebody comes with regulations that make it difficult for someone from certain geographical locations to invest in Europe or the West, people will take their investment somewhere else," he said. "I think it's dangerous when this money and liquidity is so badly needed – we are investors and we are free to go wherever we want. If you squeeze us, we will go elsewhere."
Mr bin Sulayem's comments follow calls from two European commissioners this week for better corporate governance standards and greater transparency from SWFs. Charlie McCreevy, the EU's internal market commissioner, and Joaquin Almunia, the EU's monetary affairs commissioner, said the funds did not make enough disclosures of key financial information and backed calls for a code of conduct for the sector.
The EU's concerns reflect similar anxieties voiced by a number of European and American politicians over the past 18 months, as SWFs have taken a greater number of large stakes in a range of different companies. Two years ago, Dubai World was forced to sell off the US ports owned by P&O when it bought the British company, amid American fears about key infrastructure coming under foreign ownership.
Yesterday, however, Mr bin Sulayem rejected calls for greater regulation of funds such as his, arguing that there had never been an example of an SWF buying up Western companies for political or strategic reasons, rather than on the basis of potential investment returns. "If you put a politician in charge of an investment, believe me, that investment fund will not last for a very long time," he said.
The Dubai World chairman's comments reflect growing anger among the leaders of SWFs at the attacks on their activities. At last month's World Econ-omic Forum in Davos, a string of SWF executives made similar warnings.
Bader al-Sa'ad, managing director of the Kuwait Investment Authority, said: "The KIA has been operating for 55 years and has never made a political decision – we look to the bottom line."
The EU's attempts to curb the power of SWFs are being led by the French and German governments, which have both been openly hostile towards the sector. The UK has offered limited support for calls for more transparency, though ministers have been at pains to make it clear they welcome SWF investment in British companies.
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