Bahrain: A top government minister has rubbished allegations made by a parliamentary probe committee that Bahrain’s sovereign wealth fund was losing millions of dinars.
Transportation and Telecommunications Minister Kamal Ahmed was responding to claims made by the committee probing financial and administrative conditions of Bahrain Mumtalakat Holding Company.
The committee compiled, over 18 months, 300 pages of irregularities involving the 30 companies under Mumtalakat, which include Gulf Air, Bahrain International Circuit, Batelco and NBB.
However, Mr Ahmed said MPs were making judgements based on past performances and not recent developments.
He was speaking during parliament’s weekly session yesterday, where several MPs led by woman and child committee chairwoman Roaa’a Al Hayki demanded Mr Ahmed be questioned on the open floor.
“We made BD92 million dividends in 2013 of which BD60m was our clear profit, and in 2014 we had dividends of BD81m of which BD50m was our profit, while last year’s dividends and profits will be announced soon and they show a bigger improvement,” said Mr Ahmed.
“The money we make goes to our biggest company Gulf Air, Bahrain’s national carrier, so it could run efficiently and without them being forced to take anything from the
government.
“Gulf Air was under losses when it was with the former four GCC states and when we got 100pc ownership in 2008 after withdrawals from others, financial commitments had to be paid and pending losses had to be dealt with.
“The companies we were given under Mumtalakat have been given to us with their financial woes and not as in the case of other sovereign funds with proper amounts of money and we had to work accordingly – the only payment made by the government was in 2007 and it was BD5m for employees and operational costs.”
Mr Ahmed said Mumtalakat’s most profitable companies were NBB and Batelco.
“Edamah, the real estate management arm, was given all government properties to invest in 2007, but in 2011 a third was returned by the government and this is why there are losses in books that we needed to indicate, but in actuality there are no losses since we were given buildings and plots to generate income from,” explained Mr Ahmed.
“Some of the existing contracts are long term and were under low rates to private companies and individuals, but we are addressing the situation – again there are no losses because we are collecting payments.”
The GDN reported on Saturday that Mumtalakat paid its board members BD15,000 annual bonuses besides BD500 for each meeting attended, despite being in the red with losses reaching BD560m by the end of 2014.
Mumtalakat had also borrowed BD586m in loans between 2006 and March last year, according to the probe report.
Chaired by MP Ahmed Qarata, the panel said in its report that BD3.717m were paid in bonuses to board members between 2008 and 2014.
MPs yesterday voted on 30 recommendations suggested by the probe committee, which prohibits companies under the wealth fund to receive financial support from the
government.
The recommendations include preventing board members from having memberships in multiple companies, and distributing performance-related bonuses that would be linked to profits.
Merger
They also include merging all companies operating in the same field, such as aviation.
The report also expects Mumtalakat to pay a percentage of its annual profits to national coffers, while putting up “failing companies” to public offerings.
“Failing companies can go to public offerings, but that will take time, no one will invest in losses,” said Mr Ahmed.
“Give us the time to steer them into profitability and we will then do whatever parliament wants, we want to make money too since we will continue having our shares.
“Let us fix the problems first and as I said we are in a healthy position now, some problems have a long-term effect, we are dealing with extensive measures and they are going in a right direction.”
In a written response to parliament, Gulf Air revealed that it had trimmed 1,266 employees from an original workforce of 3,850 since 2012.
However, the state-owned national carrier refused to give details on employees who earned more than BD2,500 a month, claiming it was irrelevant.
It also asked MPs not to compare it with other regional airlines and claimed it was now in a better position than previously, having reduced its losses.
Meanwhile, Edamah in another written response refused to disclose details about its 65 major properties, stating it would harm plans to attract investment.
The parliamentary committee said the company which was established 10 years ago has so far contributed nothing to state revenues.
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