I thought the questions were pretty straight forward.
“Can you give me a list of Dubai World’s hotel investments, and also the value of these investments?” I asked the Dubai World spokesman, who agreed to be interviewed but not identified in last Thursday’s piece about regarding what ripple effects might be caused if Dubai World were unable to restructure its US$26 billion debt.
“I’ll talk to my contacts at Dubai World,” the spokesman responded when we initially spoke on 4 December. “It’s on the weekend there now, so maybe Monday or Tuesday.”
Tuesday came. No list.
“Apologies—I am not ignoring you, I just have not managed to get a list of hotels owned by Dubai World,” my source e-mailed me in response to a voicemail I had left asking where my list was. “I am chasing.”
The chase ended the next day.
“Sorry to disappoint you but I cannot get hold of a comprehensive list of hotels and as a private business, we simply don’t disclose this sort of information publicly,” he e-mailed.
As it turns out, there could be a very good reason why my source could not get a complete list for me: The state-owned company might not know the answer to my seemingly simple question.
I realize it sounds preposterous that a company the size of Dubai World would not know where its investments lie, but consider that Chris Turner, a former director of risk and asset management at Dubai World unit Istithmar World, said that in 2007 he and his team attempted to build a list of all Dubai World’s real estate holdings, according to BusinessWeek. The task that was supposed to take a few months instead took about a year.
Amazingly, his team allegedly found some loan documents and sale agreements in an office that had been vacant for months.
Also according to BusinessWeek, an unnamed top U.S. executive with extensive dealings around Dubai, compared the company’s corporate structure to “a bowl of spaghetti.”
And now there comes word that good neighbor Abu Dhabi’s central bank has stepped in to lend Dubai US$10 billion to help Dubai World pay off its debt.
It’s hard for me to get my mind around that: A US$10-billion helping hand to a company that may or may not know its own investments.
If during the automaker bailouts, President Obama announced he was giving billions to Ford, General Motors, and Chrysler, even though the companies didn’t quite know where all of their factories were located, I have no doubt impeachment proceedings would have begun.
But far from condemnation, Abu Dhabi’s actions were met with cheers from investors as stock markets worldwide rallied with the news.
And here I thought providing mass sums of money to people who weren’t clear with the details of their assets is what started this global financial crisis in the first place.