A former finance executive in Dubai, Remi Ishak, who served as the chief financial officer of Equitativa and Emirates REIT, has been fined Dh122,000 by the emirate’s Financial Services Authority (DFSA). This penalty was imposed due to his involvement in account breaches and making misleading statements for a publicly listed company.
In December 2021, the DFSA penalized Equitativa for several reasons, including making misleading statements related to Emirates REIT, not following International Financial Reporting Standards (IFRS) for financial statements, and failing to ensure the auditors received relevant information.
The DFSA found that Ishak played a part in these breaches. Specifically, in 2018, while serving as the CFO, Ishak made public statements about a vacant school with unpaid rent of over Dh9 million. He stated that a new tenant had been secured for the following academic year, misleadingly implying that it wouldn’t impact the asset’s revenue and valuation when no binding agreement was in place at that time.
Ishak also approved Emirates REIT’s 2018 half-year financial statements without including provisions for the unpaid rent or asset value impairment for the school, as required by IFRS. The report incorrectly stated the asset as 100% occupied, assuming a long-term tenant was in place.
As the CFO, Ishak didn’t take reasonable steps to ensure Equitativa or its employees provided necessary information regarding the asset’s recoverability to Emirates REIT’s external auditors for their review of the 2018 half-year financial statements.
This resulted in a breach of Principle 2 of the DFSA’s ‘Principles for Authorised Individuals’ because Ishak failed to act with the necessary skill, care, and diligence in his role as a finance officer at Equitativa.
Ian Johnston, the chief executive of the DFSA, emphasized the crucial role of CFOs in public and listed funds, stressing the importance of ensuring fair and accurate financial statements and transparent information sharing with external auditors.
