Dubai: The Dubai-based engineering firm Drake & Scull International has filed a case in Dubai Courts against the previous management related to a Dh830 million evaluation at the time of its IPO in 2008.

The Dh830.46 million was included in the company’s asset items – but there was no detailing of how this value was reached and on ‘what basis the value of goodwill was calculated’. In fact, the value exceeds by six times the acquired tangible assets, Drake & Scull states in a DFM update.

Tellingly, ‘no documents were found to support this inflation or to prove its validity’.

The filing of the case comes at a critical time for the company as it awaits a local court’s verdict on whether it should go into liquidation under the UAE’s Bankruptcy Law. Drake & Scull’s accumulated losses are at Dh5 billion plus.

Effectively, the current management has two legal processes to deal with – one, to stave off being declared bankrupt and, two, try and press its financial claims against the earlier management.

More to follow…