Asset hunt
by mahmood on 24/05/08 at 10:11 am
A push by Bahrain’s parliament for greater transparency in recording government assets could mean delays for the Kingdom’s main investment authority, which has announced plans to diversify its holdings.
Last November, a parliamentary committee was established to determine the extent of the government’s assets and investments, and to investigate whether there had been any abuse or mismanagement of them. On May 18, Sheikh Abdulrahman bin Ali Al Khalifa, the director-general of the Survey and Land Registration Bureau, told the committee a registry had not been completed, meaning there was still no clear record of the state’s holdings and property.
“There are a lot of unregistered government properties and assets, but we have managed recently to recover seven government plots and had them registered. We are in need of reorganisation to ensure that we have clear statistics,” Sheikh Abdulrahman said.
Much of the focus of the inquiry has fallen on the Bahrain Mumtalakat Holding Company, the government’s main investment arm, established in 2006. Mumtalakat has holdings of around $10bn, with 98% of its portfolio located within the Kingdom.
The company has a wide range of investments, including aluminium production, property, agriculture, telecommunications and tourism. It has recently revealed its intention to divest some of its local holdings and spread its asset base equally between domestic and overseas locations over the next five years.
“We’re looking at several opportunistic deals in the US,” Talal Al Zain, Mumtalakat’s chief executive officer, told the press on May 20. “We’re looking at the insurance space.”
While not going into details about which US firms were being targeted as potential investments, Al Zain said the company had no intention of investing in the US banking sector, at least for now.
Earlier in May, Al Zain said the US subprime crisis presented opportunities for cashed up funds such as Bahrain’s.
“I am looking at distressed investments,” Al Zain told the local media on May 15. “Given the conditions of these markets, they will have to access the liquidity we have.”
The company was also considering expanding into telecommunications, renewable energy and financial services, he said.
However, these plans are one of the issues that have concerned the parliamentary committee, which has claimed Mumtalakat has stalled in providing detailed information on its current holdings.
Committee secretary Sayed Abdulla Al A’ali said the fund was being less than forthcoming regarding the properties it managed.
“Mumtalakat’s chief executive officer Talal Al Zain told us the company only deals with properties transferred to it by the finance ministry and said listing all the government property and assets would take a lot of time, promising to give us information as soon as possible,” Al A’ali said on April 21. “We have not received this information [yet] and instead general information about Mumtalakat has been presented to us. Mumtalakat runs 34 companies, which the government has 100% control over.”
Mumtalakat has said the 34 companies it operates are independent entities and as such are not registered under its name.
The committee has questioned whether the holding company was legally authorised to sell any of the assets transferred to it. If, as some members have contended, the company can only dispose of assets with the assent of the King, this could put a spanner in the works of Mumtalakat’s overseas expansion plans.
