Gulf banking regulators to tighten governance
Dubai, October 14, 2009
Regulators in the Gulf region -- hit by a number of corporate scandals -- are pushing for stricter corporate governance standards in the banking industry, an expert said.
Kuwait, Saudi Arabia and Oman are pressing for stricter enforcement of existing corporate governance guidelines, according to Nikolai Nadal, director at thinktank Hawkamah Institute of Corporate Governance, which is working with authorities to improve governance standards.
Calls for improvement in standards come as a number of scandals involving lawsuits in the broader corporate sector hit the region since the credit crisis.
"The central bank of Kuwait and Sama (Saudi Arabian Monetary Authority) are considering introducing mandatory reform of corporate governance guidelines. The UAE (United Arab Emirates) is still in draft stages," Nadal told Reuters on the sidelines of a conference.
"Measures will vary from country to country. We're suggesting certain proposals to be mandatory... The framework is there. Now Sama is starting to tighten the bolts... make sure enforcement measures are in place and sending strong messages to companies."
Prominent Saudi business groups Saad and Ahmad Hamad Algosaibi & Bros (AHAB) shocked the Middle Eastern banking community when they defaulted on some of their debt in May. - Reuters