DUBAI (Reuters) – Shares of Tamweel fell more than 4 percent on Tuesday, to close at their lowest level since October, after its deputy chief executive was detained for questioning by Dubai police in an ongoing investigation.
The detention of Abdulla Nasser Abdulla follows a current investigation into the former chief executive and head of investments at the Dubai mortgage lender.
“Tamweel wishes to disclose that Abdulla Nasser Abdulla … has been detained for questioning by Dubai government authorities,” it said in a statement on the Dubai bourse website.
The company said it could not comment to avoid influencing the investigation.
Abdulla and Tamweel’s chief executive could not be reached for comment. Abdulla was appointed in July.
“We are very pleased with the government’s actions which reflect a very low tolerance to embezzlement in Dubai … this will encourage future investments into the country,” said Rami Sidani, head of MENA investment at Shroders Investment Management.
The detention is the latest in a series of highly publicised probes into officials at major Dubai companies, mostly linked to the real estate sector, as the emirate’s government attempts to crack down on corruption.
Prosecutors in Dubai said last month that fighting corruption was a top priority for the Gulf Arab business hub and pledged a zero-tolerance policy on violations.
Property shares in Dubai have fallen sharply recently as the government’s efforts to clean up the real estate market have dented investor confidence.
“It’s not going to be positive, but providing the market takes this as a house-cleaning exercise, it might not have a big effect (on real estate shares),” said Raj Madha, an analyst at investment bank EFG-Hermes.
Tamweel said in August the possibility that an investigation into former executives could lead to cash losses was “remote” and there would be no impact on profit.
It pledged on Tuesday to act in the interests of its shareholders.
“Please be rest assured that Tamweel continues to act in the best interest of the country and all its stakeholders, including its shareholders and sukuk holders,” it said.
Shares of Tamweel, which closed 4.06 percent lower at 5.20 dirhams ($1.42), have fallen nearly 32 percent since early August.