Dubai Group – a subsidiary of Dubai Holding, which is mostly owned by Mohammed bin Rashid Al Maktoum, Dubai’s 63-year-old leader and vice-president of the United Arab Emirates – was forced to cut a deal when legal proceedings were brought by the banks last autumn.
According to Gulf-based magazine, The Brief, Britain’s Royal Bank of Scotland, Commerzbank in Germany and South Africa’s Standard Bank launched a court bid last September to recover funds. They were later joined by Egypt’s Commercial International Bank in a move that followed some two years of failed negotiations over a restructuring plan for the investment company.

Property bubble

The report says the settlement will involve Dubai Holding buying the debt of Dubai Group, the overall amount of which is estimated to be around $10 billion.
Along with other state-owned businesses, Dubai Group has been struggling ever since the start of the global financial crisis in 2008, not least because of the emirate’s over-reliance on a Gulf property boom that burst when international investors drew in the horns. In 2009, Dubai World, the government-backed investment company, effectively defaulted on its global loan package.
According to the report in The Brief, Dubai Group declined to comment on the latest court settlement.