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Dubai is again aflutter with gossip over a new power shift in the debt-laden emirate, which saw multiple management changes in 2009 as it tried to come to terms with a debt pile of $110bn.

As the FT reported on Monday night the ruler of Dubai replaced Ahmed Humaid al-Tayer (pictured) as governor of the Dubai International Financial Centre, the emirate’s offshore financial centre and a significant strategic asset. That came shortly after he was dropped as chairman of Emirates NBD, the United Arab Emirates’ largest bank.

Observers are saying al-Tayer was reeling after he found out about being ejected from the bank though a statement to the media. They say he then promptly resigned from all his posts – if true, an act of lèse majesté that couldn’t be verified.

Al-Tayer was chosen for the DIFC role in November 2009, a month before the emirate was bailed out with a $10bn lifeline from Abu Dhabi, the UAE capital.

He was part of a group appointed by Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum to get Dubai’s ship in order. Over the last two years – alongside others including Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates, the airline, and Mohammed Ibrahim al-Shaibani, chief of the ruler’s court – al-Tayer has emerged as a central figure in the emirate’s leadership.

But having being entrusted with some of the most prestigious roles in Dubai, his star is now fading, observers say. There is little indication of why this may be – unless it is to reopen room for those friends and relations of Sheikh Mohammed who were sidelined as the debt crisis erupted.

Compare his luck, for example, with that of Sheikh Ahmed, an uncle of Sheikh Mohammed whose responsibilities are growing by the month. He was given al-Tayer’s role at Emirates NBD.

Questions remain as to whether al-Tayer will keep his role in the Supreme Fiscal Committee, set up to help rein in spending and get Dubai’s companies back on track.

In recent months many investors have seen Dubai as a haven amid the unrest that has spread across the Middle East. Progress is also being made on the emirate’s various debt restructurings.

The emirate has successfully tapped debt capital markets, a sign that investors are again comfortable with its bonds. But Dubai still has a lot of debt to deal with. Any hint of a change of course, and bondholders may not be so happy.

Related reading:
Dubai replaces head of offshore financial centre, FT
FT interview: Ahmed al-Tayer
UAE file, beyondbrics