The Dubai Financial Services Authority (DFSA) has levied a $210,000 penalty on Dubai-based fund manager Equitativa for misleading statements about an asset included in its real estate investment trust (Reit).
According to the regulator’s statement, Equitativa was found to have made two misleading statements in 2018 regarding its investment in a school in Dubai Investment Park.
Equitativa, which acts as both the fund manager and reporting entity for the Nasdaq Dubai-listed Emirates Reit, was ruled to have breached Article 56(2) of the Collective Investment Law 2020.
In addition to the fine, Equitativa has also accepted an enforceable undertaking to address concerns over its valuations practices. According to the DFSA the fine would have been $300,000 but for Equitativa accepting the terms of the settlement.
“Investors have the right to expect that information provided by a fund manager about the performance of the fund is accurate, complete, and not misleading and that financial statements published by a firm fairly reflect the true state of the business,” said Christopher Calabia, CEO of the DFSA. “This expectation is particularly important for a publicly traded fund like Emirates Reit.
“The Enforceable Undertaking has been designed to improve Equitativa’s valuation practices and enhance monitoring of those practices going forward,” he added. “We expect these measures to strengthen investor confidence in the future.”
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