As dozens of workers hustle over the sprawling lots adjacent to the fine sands of Al Mamzar beach, local officials are grumbling over the villa and the rest of the property of Majid Al Futaim, the deceased patriarch of a shopping and entertainment empire that is a Anchor is. Dubai’s economy.
A residential villa under construction in the Al Mamzar beach district in Dubai, United Arab Emirates. Family-owned companies have been critical to the emirate’s development, and a messy succession plan risks distraction and disruption, as the region looks to shift its economy away from its reliance on oil.
“As with many other major family-owned groups in Dubai, the stakes are too high to end such succession disputes,” said Christopher Davidson, Associate Fellow of the Henry Jackson Society.
When the octogenarian died in December, Al Futaim’s legacy remained unresolved. While the villa was meant as a residence for him and his third wife, the centerpiece of the property is Majid Al Futaim Holding.
The company controls $16.5 billion in assets, including a renowned indoor ski hall, the Grand Mall of the Emirates and the Carrefour hypermarket franchise in the Middle East. It has activities in 17 countries spread across Africa. Investors also have debt of about $ 3.7 billion in corporate debt.
Buyers walk into the Mall of Emirates shopping complex, which is operated by . Done through Majid Al Futaim Holding LLCin Dubai, United Arab Emirates. MAF According to people familiar with the discussions, it is now in transition for many owners and the process could lay the groundwork for more extensive changes.
Options include selling off parts of the group, an investment by a sovereign wealth fund and a public listing, said the people, who asked not to be identified because the discussions are private. No decisions are imminent, he said.
The process will take time as the family and company try to avoid disruption and the emirate seeks to maintain its reputation as a relative safe haven amid the geopolitical turmoil caused by the war in Ukraine.
Dubai’s leaders, to oversee any potential dispute Sheikh Mohammed bin Rashid Al Maktoum Appointed a special judicial committee, a relatively rare event reserved for high-profile cases. The body is headed by Asa Kazim, chairman of the group that runs the Dubai Stock Exchange.
Ten people, including three wives, one son and six daughters, have claimed the property, which was estimated at $6.1 billion at the time of Al Futaim’s death, according to the Bloomberg Billionaires Index.
The prospect of the MAF listing encourages family-owned groups with Dubai interest to boost the local stock market.
Stakes have been decided and registered in the MAF, and a shareholder meeting is being arranged for the nine family members after Al Futaim’s wife from Abu Dhabi transferred her stake to her daughters. except none of the heirs Date Al Futaim, the only surviving son and a member of the board since 2011, has held a role in the group.
“The company will continue to run as it has been,” said Habib Al Mulla, a lawyer for Tariq and his family, adding that Tariq aims to remain a member of the board. “It had one owner, and now it has nine owners.”
Much work is being done on listing, appraising and distributing Al Futaim’s personal assets such as planes and boats to various locations. All told, according to Al Mulla, negotiations on the legacy are likely to take at least a year.
“At this point in time, I think it’s too early to talk about any IPO or stake sale or anything,” he said.
The entrance to the Carrefour SA supermarket in Dubai, United Arab Emirates. MAF, which has been run for years by professional managers, said it has “a clear and comprehensive plan to maintain normal operations” and is pursuing its expansion strategy. It added that no decision has been taken on any future listing or stake sale.
“Like any prudent business, we will continually review our operations and respond appropriately to any changing market conditions,” the company said in an e-mailed statement to Bloomberg. The intention is to ensure that “we are fit-to-purpose and well-positioned to capture growth opportunities and better serve our customers.”
Marriage relations with other prominent families in the UAE complicate issues over the future direction of the MAF. The heirs have gathered into four groups. One is based in Dubai around Tariq and his family, and the other in Abu Dhabi. Two persons, including Al Futaim’s third wife, have their own lawyers. Representatives for the other three groups declined to comment.
Like some companies, MAF represents Dubai’s remarkable growth, but also its fragility. The rulers were dependent on merchant families, who were given control over certain areas in return for support. But as the economy opens up, the system is under strain. The Emirate has established a special heritage court to deal with potential conflicts.
Al Futaim set up the business in the 1990s with funds from a succession dispute with his cousin. His company was the first to combine shopping and entertainment – a formula that attracts large numbers of people during the hot summer months and is expanding into Cairo and Riyadh.
Under Islamic law, Tariq would have the largest single stake – two other sons died in separate boating-related incidents. The exact distribution of holdings among the shareholder groups is not disclosed.
Emirates is in the process of easing continuity by prompting family businesses to work ahead of schedule, so employees, bankers and local authorities are not left in the middle. Omar AlghanimHead of a network that represents family businesses.
“You have systemic risk that runs across the system, and that’s something that’s really becoming an issue,” he said.