Mysterious growth of a United Arab Emirates company: from zero to $240 billion in three years

The extraordinary growth experienced by the International Holding Company (IHC) based in the United Arab Emirates (UAE) in the last 3 years has drawn attention to this company. Although it was a small-scale company 3 years ago, it remains a mystery how this holding company, which surpassed the world’s giants, grew so much.

Three years ago, IHC was a little-known company with fish farms, food and real estate businesses. Initially, the company employed only 40 people. Today, the Abu Dhabi-based group has a market value of $240 billion, more than double that of global giants Siemens and General Electric, and the company has 150,000 employees.

This is an extraordinary transformation that is hardly noticeable outside the United Arab Emirates and not fully understood even by bankers in the region. While the holding company’s share price has risen 42,000 percent since 2019, the group has become the second-biggest company in the Middle East after Saudi oil company Saudi Aramco.

MYSTERIOUS GROWTH

Despite accounting for a third of the benchmark Abu Dhabi Stock Exchange index, FADX 15, it is unclear how the share grew so fast in such a short time.

Syed Basar Shueb, CEO of IHC in mid-2019, insists in an interview with the Financial Times that there are simple explanations for the company’s growth. Shueb dismissed suspicions about rapidly rising stock prices, saying concerns about this event were “the ignorance of bankers who did not properly analyze it.”

Shueb said the company has grown so large thanks to the transfer of more than 40 companies with a total value of $4.7 billion from another Abu Dhabi conglomerate, Royal Group, that most of the companies have been transferred at a face value of 1 dirham each. .

However, this statement does not fully explain how IHC’s total assets increased to $54 billion in the third quarter of 2022, from $215 million in assets at the end of 2018. This is due to the growth of the businesses it currently controls, according to IHC.

According to the Financial Times, the growth of IHC is an example of the increasingly blurred relationship between business and power in Abu Dhabi.

SISTER OF THE PRESIDENT

Sheikh Tahnoon bin Zayed al-Nahyan, who became president of the holding company in 2020, is one of the most powerful figures in Abu Dhabi. He is also a national security adviser and full brother of the President of the United Arab Emirates and Emir of Abu Dhabi, Sheikh Mohammed bin Zayed al-Nahyan.

In addition to these relationships, the growth of the company also raises questions about transparency. Audit firm E&Y said IHC’s review of its financial statement for the third quarter of last year was “less thorough” than an audit conducted against international standards and therefore E&Y was unable to provide assurance on “significant matters “.

Shueb, for his part, stated that the company has a budget of $10 billion for investments and aims to increase group revenue from $7.7 billion in 2021 to $27 billion in 2023, thanks in large part to to acquisitions.

GIANT INVESTMENT IN TURKEY

IHC’s key deals in 2022 include Asia’s richest man Gautam Adani investing $2 billion in his three companies in India. Additionally, the company purchased half of Kalyon Energy in Turkey in 2022. The company also continues to pursue opportunities in markets as diverse as Asia, Latin America, Turkey and Indonesia.

The group also has investment shares in some major US companies, including Elon Musk’s SpaceX venture. The group is said to have begun developing relationships with international banks, including a “multi-billion dollar” loan from Standard Chartered, and has also established relationships with giants such as Goldman Sachs and UBS.

THE RICHEST FAMILY IN THE WORLD

On the other hand, the private wealth of the Nahyan family, which rules the UAE, is known to be at least $300 billion, and the country’s public funds exceeding $1.2 trillion are in the hands of the family. Nahyan. With this wealth, the Nahyan family is the richest family in the world.

The exact size of the family’s wealth cannot be given, as there is no transparency and the boundaries between royal family assets and state assets are blurred. First Abu Dhabi Bank worth 8 billion dollars, Manchester City club worth 3 billion dollars, real estate in Manchester and London of England worth 1 billion dollars, yachts worth 780 million dollars they are also part of the family wealth.