Tamweel headed towards its lowest close on record after the Islamic mortgage company said all disputes and cases filed with a special committee will be transferred to the Dubai Court of First Instance.
All legal cases, applications, complaints and disputes filed against Tamweel will be moved from the committee, the company said in a statement to the Dubai bourse yesterday.
Tamweel lost 3.1 per cent to 72.5 fils, the lowest closing price since July 2006, when the company listed its shares on the Dubai Financial Market.
Trading in Tamweel shares was suspended for more than two years after the global financial crisis blocked access to funds. Amlak Finance and Tamweel were the two largest home finance providers in the country, especially to the host of Dubai property developers, such as Nakheel and Emaar Properties,which have faced challenges selling apartments and villas more recently in a depressed property market.
The ruling also applies to Amlak, whose shares have been frozen since 2008. There are currently 45 cases and disputes related to Amlak. Dubai set up a judicial committee in December 2009 to protect the creditors of both mortgage lenders, which at the time were expected to complete a long-planned merger early last year.
Tamweel jump-started lending in November, and merger plans were scrapped after Dubai Islamic Bank raised its stake to 38 per cent, making it the single largest shareholder.
Last week, Tamweel announced a financing tie-up with Deyaar Development, a Dubai property developer, to help boost lending. The financing firm will offer mortgages at Business Bay in Dubai at an optimal flat rate with no additional fees from either the developer or the finance provider.
The company in July posted a fivefold rise in second-quarter profit to Dh27.7 million as bad-loan provisions dropped. Impairment provisions fell 66 per cent to Dh13.5m, while operating income dropped 9.4 per cent to Dh148.8m.