Reuters exposes $5 bln Gulf real estate scheme

Reuters exclusively revealed on June 16 that Bahraini investment firm Gulf Finance House has spent only a fraction of the $5 billion investor money it raised on the projects the funds were destined for. Instead, the company booked enormous up-front fees and mark-ups on land projects in almost a dozen countries amid a complete absence of corporate governance at the firm. Bankers in the Gulf said the story was a turning point for the region`s struggle to improve corporate governance and banking supervision. Kuwait-listed shares in GFH fell 24 percent in the days after the Reuters investigation was published and lost 13 percent in Bahrain on the highest trading volumes in over a year. The story was continuously retweeted on Twitter for almost 24 hours.