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Dubai regulator fines Emirates REIT manager over asset report

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Dubai Financial Services Authority (DFSA) said on Wednesday it had fined Equitativa, the manager of a sharia-compliant real estate investment trust, $210,000 for misleading statements regarding one of its assets.

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Equitativa made misleading statements on two occasions in 2018 regarding one of Emirates REIT’s 11 assets, a school in Dubai Investment Park, the DFSA said.

“The DFSA also identified concerns around Equitativa’s fund valuation practices,” it said in a statement, adding that the fund manager had agreed to pay the fine.

Equitativa said in a statement that the settlement brought all investigations to a close and it could “now turn its full attention to reinvigorating Emirates REIT and accelerating its plans for growth”.

“To be clear, none of the findings alleges any financial impropriety on part of Equitativa or its employees,” it said.

Equitativa in 2018 failed to provision for money Emirates REIT (EREIT) was owed by the school despite it being in default on rental payments, the regulator said.

Equitativa did not reduce the valuation of the asset in the fund’s half-year financial statement, despite the school lacking an operator for the following academic year, the DFSA added.

“Rather, the school was presented as 100 percent occupied with a secure tenant with a 28-year lease in place,” the DFSA said, adding that this meant that “EREIT’s net profit for the six months to 30 June 2018 was overstated”.

When, later that year, Equitativa informed its investors that the school was no longer operating, it gave the “misleading impression that a new operator had been secured and would be in place for the following academic year,” the regulator said.

Equitativa in 2019 included a full provision for the money owed by the school and an impairment for the asset, both the regulator and the fund manager said.

The manager has agreed to address concerns around its valuation practices and will appoint an independent valuation expert for Emirates REIT’s 2022 valuation reports, DFSA said.

Emirates REIT this year failed to gain investor support for an offer to exchange $400 million Islamic bonds for new paper, after the coronavirus strained its finances.

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Saudi Arabia supports sustainability while ensuring global energy security: Al-Jadaan

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Saudi Arabia’s Minister of Finance Mohammed Al-Jadaan said on Friday that the Kingdom supports sustainability while ensuring energy security and the inevitability of moving to a green and sustainable global economy, “based on a flexible and thoughtful approach, to ensure energy security and economic stability in the long term.”

Al-Jadaan remarks came during his participation in the virtual panel discussion organized by the World Economic Forum, Davos Agenda under the title: Building Future Preparedness.

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He said the past two years have provided many lessons to build economic resilience and a better future preparedness, like the “the need for a bold, decisive, data driven action in risk mitigation, while balancing public health, social, and economic needs simultaneously,” according to a statement carried by the Saudi Press Agency (SPA).

Al-Jadaan said: “G20 agreed to form a joint task force from the ministries of health and finance to ensure the world is better prepared for the future, and it is important that we support these efforts,” pointing that the COVID-19 pandemic provided the world with a clear lesson that no country can fight the epidemic alone since any pandemic requires greater international cooperation.

The Minister of Finance also clarified that the transformation in the field of energy and sustainable development are two main factors to be able to build a resilient global economy, but the threat that is often ignored is the need to ensure energy security, so that the matter is not negatively affected by the transformation.

Al-Jadaan stressed that the “G20 is working with the World Bank, the International Monetary Fund and other multilateral institutions to find a way to better prepare for potential crises in the future by continuing structural reforms and managing risks, noting that in the past, it took years to produce vaccines, yet today, with collective cooperation, whether from the private sector or the government, we were able to deal well with the crisis, we were able to provide support to low-income countries and we were able to provide relief efforts in agreement with the G20 and Paris Club, while the International Monetary Fund (IMF) agreed to distribute the equivalent of $650 billion from its special drawing rights to support liquidity,” according to SPA.

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Iran says gas flows to Turkey resume after being cut due to technical fault

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Iran said on Friday its gas exports to Turkey have resumed after being cut a day earlier due to a technical fault, but a Turkish official said Iranian supplies were lower than the required volumes.

“Gas exports to Turkey, which had been suspended yesterday (Thursday, January 20) following a gas leak at a station on the Turkish side, have resumed,” the Iranian Oil Ministry’s news agency SHANA reported.

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“The brief pause in the gas exports to Turkey was due to the pressure-boosting station in Turkey needing to make adjustments to receive the gas after a fall in pressure,” SHANA said, without elaborating.

A sector official on the Turkish side said: “While it has to supply 28 million cubic meters of gas per day, Iran has been sending around 2-3 million cubic meters of gas and at low pressure.”

“The system is being disrupted due to the low amount and pressure, The compressor stations on the Turkey side are ready, operational, and there are no technical issues on the Turkish side,” the Turkish official told Reuters on Friday.

Iranian Oil Minister Javad Owji told state TV that Iran was supplying 10 million cubic meters per day, starting early on Friday, while repairs were being carried out to stop a leak.

Sector officials in Turkey said on Thursday that Iran had cut gas flows for up to 10 days due to a technical failure, prompting Turkish authorities to order gas-fueled power plants to cut gas use by 40 percent.

Turkey is almost fully dependent on imported gas from Russia, Azerbaijan and Iran. Iran alone provided 16 percent of Turkey’s natural gas needs in the first 10 months of 2021, according to the latest official data.

Iran has faced gas shortages at home because of record high consumption particularly for household heating in the winter cold and has had to cut supplies to cement plants and other industries.

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Turkey passes law exempting converted lira deposits from corporate tax

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Turkey passes law exempting converted lira deposits from corporate tax

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Turkey’s parliament approved a law late on Thursday under which lira deposits converted from foreign currency under a scheme to support the lira will be exempt from corporate income tax on gains resulting from the conversion.

State-owned Anadolu news agency said interest and profits earned on the converted lira accounts with at least three months’ maturity will be exempt from the tax if they are converted by the fourth-quarter tax return submission date, which is Feb. 17.

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On Jan. 11, Turkey’s Official Gazette announced that Ankara had included corporate foreign currency and gold deposit accounts converted to lira in the scheme that protects local currency savings against exchange rate volatility.

The scheme, announced by President Recep Tayyip Erdogan in December, compensates depositors for any loss in the value of the lira incurred during the duration of the deposit.

The lira slumped 44 percent in value against the dollar last year after the central bank slashed its benchmark interest rate by 500 basis points to 14% since September. The lira has steadied this month. It was 0.8 percent weaker at 13.43 against the dollar on Friday.

Deposits under the scheme have so far reached 163 billion lira ($12.1 billion), Erdogan said on Wednesday. But Reuters has reported that most of that amount comes from existing lira accounts rather than dollars or euros.

Also under the legislation, inflation accounting will be postponed until Dec. 31, 2023, even if all necessary conditions are met for inflation accounting in the 2021, 2022 fiscal periods and the 2023 quarterly periods.

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