UAE Fish Farm Operator IHC, Whose Stock Price Soared 400 Times, Emerges as a Global 'Big Player'

Assets Increased 250 Times Since 2019
Global Investment Expanded to 33 Trillion Won

[Asia Economy Reporter Hyunwoo Lee] Just three years ago, IHC (International Holding Company), a small fish farm operator in the United Arab Emirates (UAE), has transformed into an investment company worth hundreds of billions of dollars, attracting international attention. Since 2019, the company's stock price has surged 420 times, and it has expanded its asset size by hundreds of times by venturing into almost all sectors, including agriculture, fisheries, infrastructure, and various manufacturing industries, beyond its traditional food business.

Inside and outside the UAE, there is an expectation that the UAE royal family, the owner of IHC, will nurture the company like a sovereign wealth fund and transform it into a major national policy investment firm in the future. However, some cautious voices warn against investing due to the sudden surge in assets, lack of transparency in accounting, and the company's private operational methods.

[Image source=Arab Emirates (UAE) IHC (International Holding Company) homepage]

From Fish Farming Company to Mega Investment Firm in Just 3 Years

According to CNBC on the 14th (local time), IHC's stock price has surged 42,000% (420 times) since 2019, recording the highest stock price increase worldwide over the past three years. At the beginning of January 2019, IHC's stock price was 0.96 dirhams per share (about 325 KRW), but it soared to 410 dirhams (about 138,630 KRW) at the beginning of this year.

The total market capitalization also jumped to $240 billion (about 298 trillion KRW) in three years, making it one of the world's largest investment companies. However, the background of IHC's growth remains a mystery in the global investment industry. CNBC reported, "IHC has now become the second-largest conglomerate in the Middle East after Saudi Arabia's state-owned oil company Aramco, but even bankers in the UAE and the Middle East do not clearly understand how this company grew so much within three years."

A view of the 'Asmak' brand, a seafood processing subsidiary of IHC, located in a shopping mall in Dubai, United Arab Emirates (UAE). [Image source= Asmak Twitter]

Originally, IHC was a small company with about 40 employees engaged in fish farming and selling fish. It continues fish farming and seafood processing and sales through its subsidiary, Asmak, a seafood processing company.

The company's rapid growth began after it was acquired by the Royal Group, operated by the UAE royal family, in June 2019. Since then, IHC has aggressively acquired more than 40 companies. Its asset size, which was about $200 million at the end of 2018, soared to $54 billion by the end of last year, a 270-fold increase. The number of employees, which was only 40, has now increased to over 150,000.

With such rapid growth, IHC has emerged as a major player in the global investment industry. This year, IHC invested over $10 billion overseas, including $2 billion in major listed companies in India, $2 billion in Grupo Nutresa, a large food company in Colombia, and $500 million in the Turkish energy sector. It is reported that the company plans to increase its investment scale to $27 billion this year.

Controlled by UAE Royal Family, Concerns Over Lack of Corporate Transparency

[Image source=Reuters Yonhap News]

However, since the company's operations are controlled by the UAE royal family and its rapid growth was driven by secretive mergers and acquisitions, doubts have been raised about whether its growth is sustainable.

According to the Financial Times (FT), Ernst & Young (EY), which audited IHC's accounts, stated in its review of IHC's financial statements for the third quarter of last year that "the scope of review was smaller than an audit under international standards" and "we could not obtain assurance on all material matters."

In response to these criticisms, IHC explained, "The amount of information that must be presented in interim financial statements is very limited," and "external auditors generally do not perform a full audit of such financial statements."

It is also pointed out as both a background and a risk factor for the company's rapid growth that Tahnoun bin Mohammed Al Nahyan, chairman of IHC's board and a member of the UAE royal family, is leading the company. He is the brother of Mohammed bin Zayed Al Nahyan, the UAE president and Crown Prince of Abu Dhabi, and also serves as the UAE's National Security Advisor.

This content was produced with the assistance of AI translation services.