Proxy trading thriving at DSM bourse

[R.A. Hettinga]

<http://www.menafn.com/qn_print.asp?StoryID=67783&subl=true>

MENAFN - Middle East North Africa . Financial Network

Proxy trading thriving at DSM bourse

The Peninsula - 25/10/2004


Doha: DSM officials have urged Qataris not to encourage outsiders to
indulge in proxy trading, as demand for identity (ID) cards of nationals
and power of attorney issued by them, is said to be increasing in view of
the forthcoming mega public issue of Qatar Gas Transport Company (QGTC).

According to Al Sharq, there is a thriving black market as demand for ID
cards of Qataris for proxy subscription to QGTC issue to be launched in
January next year, is picking up fast.

Al Sharq quoted DSM sources as saying there are many takers for ID cards of
Qataris for the initial public offering of QGTC set for floatation on
January 16, 2005.

DSM sources told The Peninsula yesterday that some rich investors from
Kuwait, UAE and Saudi Arabia were coming to Qatar and persuading some
nationals to lend their as well as their family members' ID cards for the
purpose of proxy trading.

According to DSM rules, a national can sign a power of attorney endorsed by
the legal documentation department at the Ministry of Justice authorising a
relative, a friend or a foreign partner to buy shares in his name. "This
facility we have in place considering that a Qatari cannot be expected be
physically present in Doha all the time, so he has the right to appoint a
nominee for purchasing or selling local stocks," a DSM source told The
Peninsula.

In case the stocks are to be sold, a separate power of attorney is issued
authorising a relative or friend, who could be a non-Qatari. However, the
cheque (of the amount of sale proceeds) is issued by a broker only in the
name of the Qatari buyer of the shares concerned. The cheque is not bearer,
so the money is transferred to the bank account of the national.

It is okay as long as an ID of a Qatari and the power of attorney issued by
him or her is for genuine reasons. But the problem is that some Qataris are
being offered large sums by outsiders, especially some rich investors from
neighbouring countries, for using their ID cards for proxy trading, DSM
sources said.

Lending an ID and giving a power of attorney for the purpose of proxy
trading is not only illegal but also hurts the interest of small Qatari
investors, a DSM source said. "That is why we are urging nationals not to
encourage this trend. Instead of violating law and looking for easy money
Qataris should take loans from local banks and invest in stocks
themselves," the source added.


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R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
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