Muscat: The managing director of Galfar Engineering and Contracting has resigned from the company's board as well as his position as the managing director, following an Omani court convicting two of the company's top officials on bribery charges on Sunday.
The resignation of the top-level official, who has a combined stake of 19.9 per cent in Galfar, follows an emergency board meeting on Tuesday.
The board has been under pressure to take immediate steps to clear the premier construction company's image and to announce a succession plan.
He resigned from his position as the managing director of the company since it was linked to his position as a member of the board. The erstwhile managing director's association with the company is four decades old, ever since the company's inception. His name has remained synonymous with the company's name.
Listed by 'Arabian Business' magazine as being among the most influential Indians in the Middle East, the managing director developed Galfar from a small contracting firm to a leading regional player in multi-disciplined engineering, contracting and construction firm over the last four-and-a-half decades.
Further, he is considered a leader in the construction field and a successful non-resident Indian (NRI) businessman, not only in Oman, but also in the entire Gulf region. His rags-to-riches story has been an inspiration for many Indian entrepreneurs in the Gulf region.
"In the light of the court's decision against two senior members of the management and in the best interest of the stakeholders, the managing director has voluntarily resigned from the membership of the board of directors," the company said in a disclosure statement posted on the MSM website.
The board has taken the decision to ensure that the company's operations and businesses are not affected.
The Galfar board also decided to appoint KPMG, an international audit firm, to "establish accountability" for the recent events, review the existing policies and procedures of the company and identify any gaps in the company's internal controls to ensure that weaknesses, if any, in the system are rectified.
KPMG will also review policies and procedures for the code of conduct, including "whistle blowing" to ensure compliance and train management staff for the implementation of the code of conduct in business dealings.
The board also communicated to the shareholders, employees, bankers, suppliers, government and non-governmental clients that effective controls are in place for good governance and well-being of the company and its stakeholders.
Market sources said that the managing director, who holds a combined 19.9 per cent ownership (including preferential shares) in Galfar, may not face any issue in holding the shares. The company's shares were traded without much fluctuation at 300 baisas on the Muscat Securities Market as buying support came from certain corners.
The managing director was sentenced to a three-year jail term and ordered to pay fines worth OMR600,000 following conviction for bribery charges. Galfar, which has an order book of around OMR600 million, has an annual turnover of $1 billion.