|
"The safest way to double your money is to fold it over and put in your pocket," says Kin Hubbard. The other thing you can do, according to sarcastic residents of the Green Community (GC), is to invest in enterprises managed by Property Investments (a joint venture between Union Properties and Dubai Investment Park).
Sarcasm is based on the knee-jerk reaction to a somewhere near 300 per cent increase in service charges. The salt-in-the-wound is added by the fact that nobody has actually defaulted yet, but residents have received threats of legal action for non-payment, as well as the warning that service charges for previous years might be retrospectively added to the burden.
If Property Investments is successful, will Costa Coffee copy the strategy and backdate price hikes for drinks sold over the last three years when coffee bean prices are revised?
"It's not about the money," said one resident, none of whom can be named as they are further threatened by attending an "illegal gathering" in a letter that stated that "all of the residents that were in attendance last night could face criminal charges". Interesting twist this; one day I was one that attended a legal gathering at the invitation of Property Investments (coffee for free).
A few days later, (give or take the same people, except no Property Investments, and a bill for my coffee), I was in an "illegal gathering" with heinous criminals that included sundry professionals from the medical profession, directors, lawyers, accountants, housewives and the poor old presenter who was singled out for running a power point presentation, the purpose of which was to work with Property Investments to find an equitable solution to an awkward communication problem.
So what is all the chatter about, and how does it affect Markets columns? Simple: markets are affected by the perception of corporate governance. There is a need for corporate governance to address the issue of aligning the "strategic comments" of press conferences, vision and mission statements and the implementation of those comments at grass roots levels.
Serious issue
It's a serious issue and as local "home grown" companies enter the globalised world it's an issue that will manifestly affect the attitude of shareholders and the value of their holdings.
"It certainly isn't about the money for me," said close neighbours, who like me, believe that the GC is one of the better communities, and is so well managed that it deserves more resources and support from the residents. Indeed, I have yet to meet any of the heinous criminals who do not support the letter from the residents committee that prompted the meetings (legal and illegal) and which stated: "The primary objective of this Committee is: To ensure that the Green Community remains as one of the premier residential developments in Dubai and that the best possible environment is maintained in the most cost-effective manner". So how do you get from this objective to criminal activity by the residents? A three-step process explains.
Step one is when the company makes statements that implies it can be trusted. This is fairly straightforward. Union Properties, for example, say on their website: "The success of Union Properties is built upon six basic principles - quality, service, innovation, care, trust and diversity. Embedding these six values into every faceted aspect of the operation has enabled Union Properties to leverage itself as a leader in its field."
I have been a tenant of theirs for over ten years, and believe they have largely delivered.
Simon Azzam, CEO of Union Properties and Managing Director of Property Investments, was quoted recently in Property Weekly as aiming to provide a role model for corporate governance. It was a statement that seemed to hold substance for GC residents as there is much in writing that indicated that a residents' committee could be set up under certain circumstances, supported by verbal indications that an "unofficial" residents association could be set up. All of which would assist him in upholding the company's ethical code.
Step two is when management hears things it doesn't want to hear. In this instance, the GC residents committee seemed to focus their need for 'togetherness' on three issues. The first was the failure to supply transparency in service charge accounting. This was addressed, but magnified the queries, the most popular of which was why the residents were paying for show home and shopping centre cleaning. The second related to access to the management to discuss the accounts. The third related to the tactic of management intimidation.
Step three occurs when management ignores its own ethical code and sends threatening letters to its customers. There is nothing wrong in not having a code and or a mission or vision. It is not illegal to have an objective that states "we are in it for the money''.
Many a CEO will support Tommy Cooper's view, who, when being questioned on why he was fretting about the loss of two-bob (Dh10) worth of change said: "You don't understand, its not about the principle, its about the money."
The GC "chatter" embodies a serious challenge to corporate governance in the UAE. Companies need to supply what they say they will. The market will enthusiastically price a company that "does what it says on the tin". Union Properties and Dubai Investment do precisely that, but you have to wonder how Property Investments have got themselves into a position where, to quote another unnamed resident: "I don't care how much it costs, if we have to spend more on legal fees than the service charges they are asking for, so be it - you can't treat people like this".
Corporate governance has much to do with corporate actions matching the words.
The writer is Chairman of Mondial/Financial Partners International. This article does not necessarily reflect the views of Mondial/Financial Partners International.
|
