The managing partner of Grant Thornton, the international accounting and consulting firm, Mr Farouk and his company have been in the country since before independence.

Grant Thornton counts Habtoors, Rostamanis and Serkals as clients. These families have been an essential part of the UAE’s economic transformation. Mr Farouk believes that now, perhaps more than ever, such families need the kind of specialist guidance that his firm provides. 

“They have long-term vision and strategy, and have supported the growth of Dubai and the UAE. Now we are helping support them for the next stage, which is essentially: how to include the next generation of the family in the future. It is not a simple matter,” he says.

Most of the big family names of the country’s business scene have felt the same pressure in recent years.

The founders of the major merchant firms that arose after independence in the 1970s are getting old; they have all the experience and business skill in the world, having built successful conglomerates virtually from scratch, but they want to enjoy their later years, knowing that their children and grandchildren can take care of their inheritance.

“All the talk is of initial public offerings as the way forward, and that is a good way to bring a family company to the next stage of its development, but it’s not the only way. Companies can modernise without necessarily going public,” he says.

“They have to ask themselves the question: why are we going public? The advantages are that an IPO will strengthen governance, help raise capital, and might assist expansion plans, but an IPO itself will not do all those things. Look at BMW, one of the biggest companies in the world. It is still a private company,” Mr Farouk points out.

He was most recently involved in the planning for an IPO by Al Habtoor, the property, leisure and motor conglomerate, which was eventually called off on the decision of the founder and chairman Khalaf Al Habtoor.

Mr Farouk believes that was the right decision.

“Habtoor behaved very responsibly. They don’t need to raise capital – all their expansion plans are fully funded. They are now looking for an IPO in 2018, and I think that’s the right time.

The current projects, like the big development on the site of the old Metropolitan hotel on Sheikh Zayed Road, will be completed, and by then they’ll have a better idea of how Dubai will look. They’ve been behind every stage of the city’s expansion so far, and will be at the heart of the next phase, too.”

Dubai’s winning bid to host the Expo 2020 is very much on his mind. In a recent survey by the region’s leading research firm, Insight Discovery, Mr Farouk wrote that “the benefits [of Expo] for the country will therefore be far more significant than most commentators are currently suggesting, leaving a lasting mark for generations to come”.

He believes that the Expo will boost the small to medium enterprise (SME) sector, and will help the emirate to fine-tune its regulatory system, already recognised as the best in the Arabian Gulf.

“But there remains more to be done in regulation. Insolvency and bankruptcy laws need to be clarified, and foreign ownership regulations have to be refined. I think the run-up to Expo will accelerate this process,” he says.

On the SME sector, which is one of Grant Thornton’s main business specialities, he has firm views.

“I believe that the banks should take a more flexible approach to SMEs. There is no need for all the paperwork and red tape, the long financial histories for example, that they insist on now. If banks will only provide loans that are risk-free, why do they charge so much?” he asks.

The two big issues around Expo are legacy and affordability. Will the exhibition have a permanent effect on the UAE’s development? And can the country afford it? Mr Farouk has no doubt on either.

“I believe Dubai will experience the Shanghai effect. When Expo was staged in Shanghai in 2010, most of the companies and countries that were present there decided to stay in the city in one form or other. I think the same will happen in Dubai.

“As regards the financing, the key drivers are economic stimulus and infrastructure investment. Dubai has said it will need something in the region of US$8 billion, and in the current climate it is perfectly achievable for the emirate to raise that kind of money over six years,” he says.

Mr Farouk is Egyptian by heritage, but “Dubai born and bred”, he says. He believes forthcoming elections in Egypt could help to stabilise the country and its economy, and stimulate foreign direct investment.

“We’ve seen some big regional investment into Egypt, but the big test will come when the big international corporates put significant sums into the Egyptian economy. Then you will know the country is back,” he says.

As printed in the National newspaper (1st of April - online, 2nd of April - print)